Thursday, 4 October 2007

See Wile E. run

From the Telegraph:

The Saigon Times said this morning that the State Bank of Vietnam was abandoning the attempt to hold down the Vietnamese currency through heavy purchases of dollars.

Separately, the gas-rich Gulf state of Qatar announced that it had cut the dollar holdings of its $50bn sovereign wealth fund from 99pc to 40pc, switching into investments in China, Japan, and emerging Asia.

This action is certainly adding pressure to the dollar and further falls seem likely. But will we see a rout (aka a Wile E. Coyote moment)? Put on your gamma, take a seat, watch the action.

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