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Asian Central Banks Intervene as Dollar Tumbles

Posted By admin On October 8, 2009 @ 9:39 am In World News | Comments Disabled

David Roman
Wall Street Journal [1]
Thursday, October 8, 2009

SINGAPORE — The U.S. dollar continued to tumble against most Asian currencies Thursday, prompting a wave of foreign-exchange intervention by central banks in South Korea, Taiwan, the Philippines and Thailand seeking to limit damage to their export industries.

Traders said the dollar selloff is unlikely to fade soon, given the prospect for a long period of low U.S. interest rates to support a sluggish U.S. economy and increasing signs central banks in Asia will begin tightening monetary policies in the months ahead.

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Asian Central Banks Intervene as Dollar Tumbles  071009banner3 [2]

Surprisingly strong employment data in Australia bolstered speculation the Reserve Bank of Australia — which Tuesday became the first among Group of 20 central banks to raise rates — will deliver another increase before the end of the year. The news pushed the Australia dollar up sharply, and intensified buying of Asian currencies against the U.S. dollar.

“Investors need little encouragement to extend selling of dollars, but received two further green lights today in the form of ongoing weak U.S. consumer credit and a stunningly strong Australian employment report,” said Patrick Bennett, a strategist with Societe Generale.

The U.S. dollar’s downside against Asian currencies is “being slowed by intervention, but consolidation or rallies are opportunities to establish or add to shorts,” he said.

Full story here. [1]


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URLs in this post:

[1] Wall Street Journal: http://online.wsj.com/article_email/SB125498941145272887-lMyQjAxMDI5NTA0ODkwODg5Wj.html

[2] Image: http://www.efoodsdirect.com/gmoPeople.html?aid=14&adid=12

[3] Central banks start to abandon the U.S. dollar: http://www.prisonplanet.com/central-banks-start-to-abandon-the-u-s-dollar.html

[4] BIS: Asian Central Banks Are Pretty Good!: http://www.prisonplanet.com/bis-asian-central-banks-are-pretty-good.html

[5] Major central banks seen tolerating gradual dollar decline, but no ‘brutal’ moves: http://www.prisonplanet.com/major-central-banks-seen-tolerating-gradual-dollar-decline-but-no-brutal-moves.html

[6] Dollar Falls Most Since 2011 as Central Banks Bump Up Stimulus: http://www.prisonplanet.com/dollar-falls-most-since-2011-as-central-banks-bump-up-stimulus.html

[7] Asian Central Banks Cut Rates to Counter Impact of U.S. Crisis: http://www.prisonplanet.com/asian-central-banks-cut-rates-to-counter-impact-of-us-crisis.html

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