Toxic Dollar: Why Nobody Seems to Want US Currency
By: Simon Hobbs
CNBC Anchor
CNBC Anchor
Traders are warning of a dramatic change in dollar selling. They fear central banks from the Middle East may force their Asian rivals to more aggressively drive the dollar down.
Too Many Dollars
In 10 months, the Dollar Index has lost 14% because the world keeps accumulating dollars it doesn’t want and sells them. Asian central banks are key.
Gaetan Charbonneau | Getty Images |
In return they often receive dollars. But with the Federal Reserve printing dollars and the greenback’s value continually falling, the Asians sell those dollars in order to preserve the value of their reserves.
“Asia Pacific banks are renowned for their strict diversification” says Neil Mellor at BNY Mellon. “They hold a level with China in order to be competitive. Beyond that it’s very strict ratios. They need to swap-out of dollars.”
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