Strong Dollar Strategy
A Strong Dollar Strategy
July 15 (Bloomberg) – U.S. Treasury Secretary Timothy Geithner said in an interview with Al-Arabiya television that the administration of President Barack Obama favors a strong dollar and expressed confidence the greenback will remain the main reserve currency.
The yen and dollar weakened against most of their major counterparts as global stocks rose on speculation more corporate earnings will beat expectations, damping demand for the safest assets.
The Yen slid for a third day against the euro after Intel Corp.’s revenue forecast exceeded analysts’ estimates following better-than-expected earnings yesterday from Goldman Sachs Group Inc. and Johnson & Johnson. The Canadian dollar rose to a one-month high against the greenback after crude oil and other commodities rose.
As the Chinese were becoming more vocal in regard to the need to move away from the U.S. dollar, they were in actual fact buying more dollars than ever to keep their own currency stable
Wrote Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi UFJ Ltd. in London, in a research note today.
The Pound
The pound rose as much as 1 percent to $1.6467, the highest level since July 2, as a U.K. report on jobless claims last month indicated the worst of the recession may be over.
Chinese Holdings
The foreign-exchange reserves of China topped $2 trillion for the first time in a sign of the difficulty the nation faces in finding places to invest. The reserves rose a record $178 billion in the second quarter to $2.132 trillion, the People’s Bank of China said on its Web site. That compares with a $7.7 billion gain in the previous three-month period.
Premier Wen Jiabao said in March that China was “worried” about its holdings of Treasuries as the U.S. deficit ballooned. The nation held $763.5 billion Treasuries in April, making it the biggest foreign creditor to the U.S.
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