The markets panicked and dumped both the dollar and bonds so suddenly that our flustered bureaucrat was forced to deny the statement. Indonesia holds $35 billion in dollar-denominated reserves.įinally, a respected professor of economics and a member of the central bank’s monetary policy committee in China, was quoted on Friday as saying Beijing had cut the proportion of foreign exchange reserves held in dollars. fiscal deficit and, when that happens, the real value of the dollar will have to fall if a sharp slowdown is to be avoided," Bean told an audience of business leaders.Īnd the Indonesians…on Friday the FT reported that they too might cut their dollar holdings if it keeps sliding. "At some stage action will have to be taken to close the U.S. On Thursday, Bank of England Chief Economist, Charles Bean, threw his hat into the ring. Then on Friday, Deputy Chairman Konstantin Korishchenko said the Russian Central Bank was moving away from the ‘dirty’ float of the ruble against the dollar. On Monday, he discussed "the possibility to change the reserve structure." Readers will also recall Senior Deputy Finance Minister Alexey Ulyukayev. Readers will recall Oleg Mozhaiskov, former deputy chairman of the Russian Central Bank, pushing for gold as a an alternative to Russia’s dollar reserve. Here at the DR HQ, we’ve been following the Russian dollar-dumpers very closely… Together, the three firms account for 22 percent of the $1.9 trillion-a-day currency market. Merrill Lynch matches the yen prediction, but puts the euro at $1.39. JPMorgan put the yen at 96 and the euro at $1.37 in the same time frame. UBS marked the yen up to 103 by March, and the euro to $1.36. Last week, UBS, Merrill Lynch and JPMorgan all cut their predictions for the dollar. On Friday, sterling spiked to $1.9037, the highest it’s been in 9 months and three ticks short of a new 13-year record against the dollar. You must be slightly nervous?"Ĭable is trader-slang for the dollar/sterling exchange rate. "Have you seen what cable’s doing? UBS just lowered their forecast for the dollar…I just wanted to see how your long-dollar position was holding up. He was calling to chat about the currency markets. It was an analyst from a major pension fund in the City. "Bit of excitement in the markets last week, eh, Tom?" Your Baltimore-based editor received a phone call from London this morning.
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