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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (16949)	11/27/2004 9:31:36 PM
From: RealMuLan	Respond to of 116555

CHINA, RUSSIA TRIM DOLLARS By PAUL THARP -------------------------------------------------------------------------------- Email Archives Print Reprint November 27, 2004 -- The sliding dollar is rapidly falling out favor around the world, with China and others unloading their once almighty greenbacks. China, after Japan, is the second largest holder of dollars — about 15 percent of the world's supply. But its central bank yesterday said it's trimming its dollar holdings because the dollar is worth less than a year ago. Russia also said it planned to trim greenbacks in favor or a more profitable currency. The dollar is down about 32 percent against the euro in the last two years. Economists fear that wholesale dumping of dollars from the world's central banks — which traditionally hold dollars as their official exchange reserves — could push the greenback to even steeper lows. That in turn, could cause incoming foreign investment in dollar-denominated deals, such as stocks and U.S. bonds, to dry up. Uncle Sam gets most of its borrowed money from abroad through the sale of U.S. bonds. The China news sent the dollar dropping to its lowest ever level — the seventh new low in as many weeks. It fell to $1.3329 vs. the euro before recovering slightly to $1.3290. The dollar also dipped to a nearly five-year low against the yen, hitting 102.56 yen. The latest dollar collapse, fueled by concerns over the U.S. trade and budget deficits, has prompted central banks to abandon their usual support of the currency, traders said. nypost.com