Draghi Replaces Yellen as Savior for Borrowers Before Fed D-Day
- Eastern European governments raise more debt in euros
- Fed liftoff seen making shared currency even more popular
Can the ECB Keep Pulling the Rabbit Out of the Hat?
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For borrowing governments, the euro is picking up from where the dollar left off.
Mario Draghi’s pledge to boost stimulus is saving Europe’s developing nations almost 400 basis points in borrowing costs as they sell bonds denominated in euros rather than dollars. That’s already led to the busiest fourth quarter in three years for debt sales in the shared currency, as dollar issuance dries up. And once the Federal Reserve pulls the plug on near-zero interest rates, the euro may become even more popular among sovereign borrowers, said Sergey Dergachev of Union Investment Privatfonds GmbH.