Dollar To Weaken As China Diversifies Portfolio

According to an article in the Financial Times today, “China is to diversify the use of its swelling foreign exchange reserves“.

China’s foreign reserves are currently “the world’s largest” at just over 1 trillion dollars. According to this and other reports 70 percent of (China’s) reserves are believed to be held in US dollars“.

That being the case, there is the potential for a whole lot of Chinese held dollars to be sold back to us or other nations, further weakening the dollar which is already historically low compared to the Pound and Euro.

Full article can be found here: http://www.ft.com/cms/s/07448d3e-a985-11db-9185-0000779e2340.html

Chicken Smith View:

At least the dollar is doing well against the Yen… for now. Gold might be a safer bet all around.

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