July 1, 2010
Central banks trim greenback, euro holdings
The euro and US dollar's share of global foreign-exchange reserves both fell in the first quarter as central banks increased holdings of currencies from other economies, the International Monetary Fund said.
The US currency's portion dropped to 61.5 per cent in the period ended March 31, matching the lowest in more than a decade, from a revised 62.2 per cent in the prior quarter. The euro's share slipped to 27.2 per cent from a revised 27.3 per cent, while the yen gained and the pound was unchanged.
Central banks reported larger holdings of currencies in the IMF's category that may include Canadian dollars, Australian dollars and the Norwegian krone. Leaders including Russian President Dmitry Medvedev have called for a supranational currency to challenge the US dollar's dominance and wider international use of the ruble.
``The numbers do feed into the storyline that central banks have been diversifying,'' said Win Thin, a New York-based senior currency strategist at Brown Brothers Harriman & Co.
The IMF reports reserve holdings of US dollars, euros, pounds, yen and Swiss francs. The share of ``other currencies'' rose to 3.7 per cent, from 3.1 per cent in the previous quarter and the highest level in at least a decade of IMF record- keeping.
The euro fell 5.7 per cent against the US dollar from January through March, its steepest quarterly drop against the US currency since a 10.6 per cent decline in the third quarter of 2008. The slide has continued through the second quarter, with the euro about 9 per cent weaker since March 31.
`Safe-haven'
``The timing is kind of interesting because at the time we were all looking at significant safe-haven flows into the US dollar from many countries around the world,'' Kathy Lien, director of currency research with online currency trader GFT Forex in New York. ``It means maybe that participation wasn't necessarily from central banks, perhaps central banks were simply selling the euros and not necessarily accumulating dollars at the same time.''
The pound's share of reserves was unchanged at 4.3 per cent, while the yen's portion rose to 3.1 per cent from 3 per cent, according to the IMF data.
The IMF calculated the US dollar's share based on data from central banks that report their currency allocations. Some countries, including China, the world's largest reserve holder, don't give currency breakdowns.
Bloomberg News
Central banks trim greenback, euro holdings
The euro and US dollar's share of global foreign-exchange reserves both fell in the first quarter as central banks increased holdings of currencies from other economies, the International Monetary Fund said.
The US currency's portion dropped to 61.5 per cent in the period ended March 31, matching the lowest in more than a decade, from a revised 62.2 per cent in the prior quarter. The euro's share slipped to 27.2 per cent from a revised 27.3 per cent, while the yen gained and the pound was unchanged.
Central banks reported larger holdings of currencies in the IMF's category that may include Canadian dollars, Australian dollars and the Norwegian krone. Leaders including Russian President Dmitry Medvedev have called for a supranational currency to challenge the US dollar's dominance and wider international use of the ruble.
``The numbers do feed into the storyline that central banks have been diversifying,'' said Win Thin, a New York-based senior currency strategist at Brown Brothers Harriman & Co.
The IMF reports reserve holdings of US dollars, euros, pounds, yen and Swiss francs. The share of ``other currencies'' rose to 3.7 per cent, from 3.1 per cent in the previous quarter and the highest level in at least a decade of IMF record- keeping.
The euro fell 5.7 per cent against the US dollar from January through March, its steepest quarterly drop against the US currency since a 10.6 per cent decline in the third quarter of 2008. The slide has continued through the second quarter, with the euro about 9 per cent weaker since March 31.
`Safe-haven'
``The timing is kind of interesting because at the time we were all looking at significant safe-haven flows into the US dollar from many countries around the world,'' Kathy Lien, director of currency research with online currency trader GFT Forex in New York. ``It means maybe that participation wasn't necessarily from central banks, perhaps central banks were simply selling the euros and not necessarily accumulating dollars at the same time.''
The pound's share of reserves was unchanged at 4.3 per cent, while the yen's portion rose to 3.1 per cent from 3 per cent, according to the IMF data.
The IMF calculated the US dollar's share based on data from central banks that report their currency allocations. Some countries, including China, the world's largest reserve holder, don't give currency breakdowns.
Bloomberg News
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