Tags: us | dollar | gold

World Rushes to Prop Up U.S. Dollar

By    |   Friday, 13 Nov 2009 11:09 AM

In efforts to prop up the ailing U.S. dollar, experts estimate that some of the largest emerging economies may have spent as much as $150 billion on currency intervention over the past two months, according to data from Brown Brothers Harriman.

Though currency markets usually experience turnover of more than $3 trillion a day, traders pay close attention to what governments are doing and where they are likely to intervene.

Thailand, South Korea, Russia and the Philippines have been buying dollars in hopes of holding down the value of their currencies, as the dollar hovered near 15-month lows.

Thailand alone has bought $15 billion trying to push the dollar higher against the baht, Korn Chatikavanij, Thailand's finance minister, told The Wall Street Journal.

"Quite clearly, all Asian central banks have found it necessary to intervene, and it's costing us," Korn said.

"I'm convinced that in the long term the dollar is more likely than not to decline in value, so we're building up assets that are declining in value over time. That's not healthy."

A softer greenback makes gold, which is priced in dollars around the world, cheaper for buyers using stronger currencies.

The weak dollar has also fueled speculation that overseas central banks will move to increase their gold holdings as an alternative to the U.S. currency, CNN Money reports.

Analysts say the metal's recent strength has attracted many short-term market participants who trade largely based on momentum.

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In efforts to prop up the ailing U.S. dollar, experts estimate that some of the largest emerging economies may have spent as much as $150 billion on currency intervention over the past two months, according to data from Brown Brothers Harriman. Though currency markets...
us,dollar,gold
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2009-09-13
Friday, 13 Nov 2009 11:09 AM
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