The dollar dropped against all of its most-traded counterparts after China repeated its call for a “super-sovereign” currency.
The greenback headed for its biggest weekly loss against the euro in a month after the People’s Bank of China said the International Monetary Fund should manage part of members’ foreign-exchange reserves. China is the biggest foreign holder of U.S. Treasuries, with $763.5 billion in April.
“The concern of reserve diversification is always lurking in the background,” said Martin McMahon, a foreign-exchange analyst at Credit Suisse Group AG in Zurich.
The dollar weakened 0.8 percent to $1.4101 per euro at 8:34 a.m. in New York, from $1.3988 yesterday, extending its loss this week to 1.1 percent. The dollar will decline to a level between $1.50 and $1.60 euro in the third quarter, McMahon said. The yen weakened 0.3 percent to 134.59 per euro from 134.22. The U.S. currency fell 0.5 percent to 95.44 yen from 95.95.
The Dollar Index, which the ICE uses to track the greenback against the currencies of six leading trading partners, fell 0.8 percent to below 80.
“To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,” the People’s Bank of China said in a review of the economy in 2008 released today.
The greenback headed for its biggest weekly loss against the euro in a month after the People’s Bank of China said the International Monetary Fund should manage part of members’ foreign-exchange reserves. China is the biggest foreign holder of U.S. Treasuries, with $763.5 billion in April.
“The concern of reserve diversification is always lurking in the background,” said Martin McMahon, a foreign-exchange analyst at Credit Suisse Group AG in Zurich.
The dollar weakened 0.8 percent to $1.4101 per euro at 8:34 a.m. in New York, from $1.3988 yesterday, extending its loss this week to 1.1 percent. The dollar will decline to a level between $1.50 and $1.60 euro in the third quarter, McMahon said. The yen weakened 0.3 percent to 134.59 per euro from 134.22. The U.S. currency fell 0.5 percent to 95.44 yen from 95.95.
The Dollar Index, which the ICE uses to track the greenback against the currencies of six leading trading partners, fell 0.8 percent to below 80.
“To prevent the deficiencies in the main reserve currency, there’s a need to create a new currency that’s delinked from the economies of the issuers,” the People’s Bank of China said in a review of the economy in 2008 released today.
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