User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday November 24, 2004 - 15:00:44 GMT

Share This Story:
| | Email

Will Asia dump the dollar?

The ever-rising level of dollar reserves held in Asia poses a significant threat to the global stability. The US and Asia both have a powerful interest in avoiding a destabilising plunge in the dollar and a gradual adjustment is still realistic, especially if there is a US commitment to budget adjustment. The net dollar risks have, however, risen and could increase further, especially if individual central banks start to sell dollars more aggressively. The risks of a destabilising dollar collapse have, therefore, risen and must be taken seriously, particularly by the US. Benign neglect by the US administration is increasingly untenable.

Dollar fears increase

The issue of rising dollar reserves held by Asian central banks has been an underlying market concern for the past two years at least as intervention has pushed up Asian reserve levels, but the issue has received greater prominence over the past few weeks. The concerns have been brought into focus by the weak US dollar and by the reports of central bank reserve selling.

Scale of the problem

Asian central banks have been intervening heavily over the past year to prop up the dollar. During the first quarter of 2004, for example, Japan bought over US$300bn to stem yen appreciation. There has also been consistent and heavy intervention by the Chinese central bank to maintain the yuan peg and there has been consistent buying by other Asian banks. Chinese and Japanese central bank reserves have both increased to over US$500bn and total Asian reserves have increased to over US$2.2trn with around US$1.4trn of these denominated in dollars. Some of the increase in dollar terms has been due to a revaluation impact of non-dollar reserves, but the increase has still been very substantial.

There has been increased concern over the implications of a switch out of the dollar. Currently over 60% of reserves are still held in dollars and a reduction to around 50% would be likely to put an additional US$300bn into the global market. With dollar sentiment weak, it would be very difficult to absorb these dollars without a further significant US currency decline.

Complex relationship

There are, therefore, significant risks to the US economy as the dollar could weaken sharply. The relationship is, however, more complex than that as Asian economies are also dependent on strong US demand to support their export sectors. If there is a very sharp dollar decline, the risk of a US recession would increase as US Treasury yields rise and this would hurt Asia. There is, therefore, a strong incentive to maintain the uneasy balance that has existed over the past year. Asian central banks will also be happy to hold dollars if they can secure attractive returns in the US Treasury market.

Game theory

Students of game theory will watch the Asian situation closely. The Asian economies in general want to remain competitive and they will, therefore, not want the dollar to depreciate rapidly. It is therefore, in their interest to continue dollar buying in order to support the US currency. There will, however, be significant economic benefits to individual countries if they can quietly reduce their dollar reserves while other countries keep on buying. Such action would increase the risk of other countries following suit as they will not want to be left holding all the risk. This scenario could quickly develop into a cascade of dollar selling.

US needs to respond

The risks of China and Japan pursuing such a policy are still fairly low, but there will be a high risk in countries such as India. Reports of Russian central bank dollar selling will also increase tensions. In this context, it will be important for the US administration to make constructive proposals for correcting the US budget and trade deficits. A rise in US bond yields and narrowing of the current and budget deficits would allow a gradual market adjustment. The overall message is that dollar neglect by the US will be increasingly untenable.

The central banks will also be careful to avoid selling the dollar at its weakest point as this would compound capital losses and this suggests that they are more likely to sell into dollar strength rather than sell when the US currency is already under pressure. Sharp dollar depreciation could, however, force panic selling.


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Upgrade Your Trading experience. Try the Amazing Trader

Trading Ideas for 15 January 2018

Upgrade Your Trading. Try The Amazing Trader

Amazing Trader EVENT RISK Calendar:

Mon 15 Jan 2018
00:00 US- Holiday
Tue 16 Jan 2018
09:00 GB- CPI
20:00 US- Beige Book
Wed 17 Jan 2018
00:30 AU- Employment
02:00 CN- GDP
10:00 EZ- final HICP
14:15 US- Industrial Production
15:00 CA- Bank of Canada Decision
Thu 17 Jan 2018
13:30 US- Weekly Jobless
13:30 US- Housing Starts/Permits
16:00 US- EIA Crude
Fri 18 Jan 2018
09:30 GB- Retail Sales
15:00 US- University of Michigan (prelim) Survey

PROSPECTIVE Trading Opportunities


  • POTENTIAL PRICE RISK: HIGH- Wed -- 00:30 GMT-- AU- Employment

  • POTENTIAL PRICE RISK: Medium- Wed -- 10:00 GMT-- EZ- Final HICP

  • POTENTIAL PRICE RISK: HIGH to Medium- Wed --14:15 GMT-- US- Industrial Production

  • POTENTIAL PRICE RISK: HIGH- Wed -- 15:00 GMT-- CA- Bank Of Canada Decision

  • John M. Bland, MBA
    co-founding Partner,

    Max McKegg's Daily Forex Trading Forecasts

    Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

    Request a TRIAL of Max's Forex Service.

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105