Dollar drops on reserves concerns

The US dollar drops against major currencies on concerns that central
banks will cut the amount of dollars they hold in their foreign reserves.
......
http://news.bbc.co.uk/2/hi/business/default.stm

On 23/02/05 6:02, in article
et, "Pete"
wrote:

The US dollar drops against major currencies on concerns that central
banks will cut the amount of dollars they hold in their foreign reserves.
.....
http://news.bbc.co.uk/2/hi/business/default.stm

The stock markets were also hit, partly by the rise in oil prices.

Earl

On Wed, 23 Feb 2005 05:02:44 GMT, "Pete" wrote:

The US dollar drops against major currencies on concerns that central
banks will cut the amount of dollars they hold in their foreign reserves.
.....
http://news.bbc.co.uk/2/hi/business/default.stm


I think this is the link you wanted.

http://news.bbc.co.uk/2/hi/business/4287413.stm

....and here's a graph telling the story...
http://www.x-rates.com/d/EUR/USD/graph120.html

Dollar drops on reserves concerns

Recent rebounds in the dollar have proved to be short lived
The US dollar has dropped against major currencies on concerns that
central banks may cut the amount of dollars they hold in their foreign
reserves.

Comments by South Korea's central bank at the end of last week have
sparked the recent round of dollar declines.

South Korea, which has about $200bn in foreign reserves, said it plans
instead to boost holdings of currencies such as the Australian and
Canadian dollar.

Analysts reckon that other nations may follow suit and now ditch the
dollar.

Concerns over the dollar's outlook, and rising oil prices pushed down
US shares on Tuesday. The Dow Jones industrial average closed down
1.6%, while the Nasdaq lost 1.3%.

At 1930 GMT, one euro was worth $1.325, up 1.46% on the day.

The British pound had added 0.76% to reach $1.91, while the dollar had
fallen by 1.25% against the Japanese yen to trade at 104.2 yen.

Change in mood

At the start of the year, the US currency, which had lost 7% against
the euro in the final three months of 2004 and had fallen to record
lows, staged something of a recovery.


The comments from Korea come at a time when sentiment towards the
dollar was already softening
Ian Gunner, Mellon Financial

Analysts, however, pointed to the dollar's inability recently to
extend that rally despite positive economic and corporate data, and
highlighted the fact that many of the US's economic problems had not
disappeared.

The focus once again has been on the country's massive trade and
budget deficits, with predictions of more dollar weakness to come.

"The comments from Korea came at a time when sentiment towards the
dollar was already softening," said Ian Gunner, a trader at Mellon
Financial.

On Tuesday, traders in Asia said that both South Korea and Taiwan had
withdrawn their bids to buy dollars at the start of the session.

Mansoor Mohi-Uddin, chief currency strategist at UBS, said that there
was a sentiment in the market that "central banks from Asia and the
Middle East are buying euros".

A report last month already showed that the dollar was losing its
allure as a currency that offered rock-steady returns and stability.

Compiled by Central Banking Publications and sponsored by the UK's
Royal Bank of Scotland, the survey found 39 nations out of 65
questioned were increasing their euro holdings, with 29 cutting back
on the US dollar.
--
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DFM - http://www.deepfriedmars.com
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http://news.bbc.co.uk/2/hi/business/default.stm

I think this is the link you wanted.
http://news.bbc.co.uk/2/hi/business/4287413.stm

Oops, I included the link to BBC's business page by mistake.


Pete

Pete wrote:
The US dollar drops against major currencies on concerns that central
banks will cut the amount of dollars they hold in their foreign reserves.
.....
http://news.bbc.co.uk/2/hi/business/default.stm


E-e-e-k!!!! I see what you mean. At this rate it may be up
to $1.50 by the time I go to Brussels in June!

On Wed, 23 Feb 2005 18:50:29 -0800, "EvelynVogtGamble(Divamanque)"
wrote:



Pete wrote:
The US dollar drops against major currencies on concerns that central
banks will cut the amount of dollars they hold in their foreign reserves.
.....
http://news.bbc.co.uk/2/hi/business/default.stm


E-e-e-k!!!! I see what you mean. At this rate it may be up
to $1.50 by the time I go to Brussels in June!

It's very unpredictable, but there are more forecasts of it dropping
further than rising.

It should be of great concern to the US that its currency is
increasingly being seen as unstable and undependable. In fact, by not
doing anything about it makes it worse.

This is another reason why they want to get their social security
reform package through, as it should give the stockmarkets a bit of a
kick in the right direction. The theory being that this will
re-attract investors who have shyed away from them in recent years.

I'm glad it's not my money they are using.
--
---
DFM - http://www.deepfriedmars.com
---
--

"Deep Foiled Malls" wrote
in message ...

It should be of great concern to the US that its currency is
increasingly being seen as unstable and undependable. In fact, by
not
doing anything about it makes it worse.

I see the present situation as an intended devaluation of the dollar.
The party in power can't even whisper that they are in favor of a
devaluation (no party could), but they see a devaluation as a way to
help US exports and thus businesses.

This is another reason why they want to get their social security
reform package through, as it should give the stockmarkets a bit of
a
kick in the right direction. The theory being that this will
re-attract investors who have shyed away from them in recent years.

Yes, the Social Security "reform" package is intended to increase
demand for stocks and thus drive up stock prices and increase trading.
Perhaps the increased demand from domestic SS accounts is expected to
make up for reduced foreign investment. No politician could admit
such a thing.

Mr. Snow, now Secty of the Treasury, formerly headed a major US
railway. I gather that the senior management of the railway felt that
the Bush administration's hiring of Mr. Snow was the best thing that
could be done for the railway - Mr. Snow being seen as an airhead and
poor chief for the railway.

I see the present situation as an intended devaluation of the dollar.
The party in power can't even whisper that they are in favor of a
devaluation (no party could), but they see a devaluation as a way
to help US exports and thus businesses.

I agree with you, but it proves the complete stupidity of the Bu****es.
To use automobiles as an example, many parts of today's products
are imported. There is no such thing as an American car anymore,
just an American/Japanese/Canadian/Mexican/German car. Since
the prices of the parts have gone up dramatically, the export gains
are questionable.


Pete

"Pete" wrote in message
ink.net...
I see the present situation as an intended devaluation of the
dollar.
The party in power can't even whisper that they are in favor of a
devaluation (no party could), but they see a devaluation as a way
to help US exports and thus businesses.

I agree with you, but it proves the complete stupidity of the
Bu****es.
To use automobiles as an example, many parts of today's products
are imported. There is no such thing as an American car anymore,
just an American/Japanese/Canadian/Mexican/German car. Since
the prices of the parts have gone up dramatically, the export gains
are questionable.

What does the US export? Cars are a bad example since the US hardly
exports any cars. My "German" car was "built" in Brazil, has a
Mexican engine and Argentine transmission. My nephew in the US auto
industry travels to China these days because his company is buying
parts there.

We export food/grain, raw materials, aircraft and especially jet
engines and avionics, and some industrial machinery for example.

Airbus likes to say that their new superjumbo will be 50% American by
component value - but that's probably only the 50% of the production
that will have General Electric jet engines. The other 50% will have
Rolls engines, but even those engines will have some American
components - made by another of my nephews.

Robert J Carpenter wrote:

I see the present situation as an intended devaluation of the dollar.
The party in power can't even whisper that they are in favor of a
devaluation (no party could)

Really? I seem to recall them doing just that, some years
ago! It was long before my European travel, so it didn't
mean much to me at the time, but it was certainly in the
headlines as a deliberate measure on the part of the U.S.
government.