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Dollar tumbles: Asian countries intervene

This is real and happening right now!

(WSJ) The U.S. dollar continued to tumble against most Asian currencies Thursday, prompting a wave of foreign-exchange intervention by central banks in South Korea, Taiwan, the Philippines and Thailand seeking to limit damage to their export industries.

Traders said the dollar selloff is unlikely to fade soon, given the prospect for a long period of low U.S. interest rates to support a sluggish U.S. economy and increasing signs central banks in Asia will begin tightening monetary policies in the months ahead.

Surprisingly strong employment data in Australia bolstered speculation the Reserve Bank of Australia — which Tuesday became the first among Group of 20 central banks to raise rates — will deliver another increase before the end of the year. The news pushed the Australia dollar up sharply, and intensified buying of Asian currencies against the U.S. dollar.

“Investors need little encouragement to extend selling of dollars, but received two further green lights today in the form of ongoing weak U.S. consumer credit and a stunningly strong Australian employment report,” said Patrick Bennett, a strategist with Societe Generale.

The U.S. dollar’s downside against Asian currencies is “being slowed by intervention, but consolidation or rallies are opportunities to establish or add to shorts,” he said.

It was the latest effort by Asian monetary authorities in recent weeks to temper rallies in their currencies, which have been driven higher by investors fleeing the U.S. dollar and placing bets that Asia will lead the global economic recovery. While stronger Asian currencies could help to contain inflation as the region’s economy gathers steam, exports could suffer, leaving countries vulnerable when fiscal stimulus measures are eventually withdrawn.

The Bank of Thailand confirmed it intervened, saying the baht’s strength since early this month isn’t justified by fundamentals.

“The baht has appreciated a little too rapidly compared with our fundamentals. … The central bank has tried to take care of the baht so that it doesn’t get too strong,” Assistant Governor Suchada Kirakul told reporters.

The U.S. dollar was recently trading at 33.29 baht, above its intraday low of 33.25 baht.

In the other countries, the central banks didn’t make public statements.




Asian countries step in to support dollar
By Kevin Brown in Singapore
October 8 2009 15:09 | Last updated: October 8 2009 15:09

Asian central banks intervened heavily in the currency markets on Thursday to slow the slide of the US dollar amid growing concern about the potential impact on the region’s export driven economies.

Traders said most of the Asian central banks had been buying US dollars, with the Bank of Korea among the most active following a round of intervention by Seoul earlier in the week.

Other central banks identified by traders as significant buyers of US dollars included Thailand, Malaysia, Taiwan and Singapore, which is a frequent market participant because of its managed currency regime.

In Hong Kong, the Chinese territory’s central bank said it had injected HK$8.525bn into the financial system to prevent the currency from rising beyond its fixed trading band against the US dollar.

The central bank intervention appeared to have been triggered by a fresh wave of dollar selling by investor concerns about weak consumer credit figures in the US. Upward pressure on Asian currencies increased as Australia released strong employment growth numbers only two days after becoming the first G20 central bank to raise interest rates since the beginning of the global financial crisis.

The dollar came under fresh pressure across the board on Thursday



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it was Alan Greenspan himself who suggested the gulf states don't peg themselves to the dollar in 2008 and now it's coming to pass. See my blog at the victory1project link below.

Detective Krum Investigates:

Detective Krum Investigates:

I looks like a paper fight.

I looks like a paper fight. They are going to buy up dollars by printing more of their local money. Then probably deposit the dollars at the IMF. They will in exchange get SDRs.
I suggest buying tools first.
Then stock up on food, but if you have the right tools you can produce your own.
Then as always, I suggest buying palladium. It as well is being bought up by governments around the world as a reserve currency.

I can only imagine what this

I can only imagine what this is going to do to the US banks. If people are starting to buy gold this rapidly then they are pulling out their dollars in the banks to do so. This is what a real pressure test is. Will be interesting to watch what happens tomorrow in regards to the FDIC.

SteveMT's picture

When they either run out or people cannot afford gold,....

they will buy up all of the available silver. Silver is the common man's gold.

Wow. I look for to watching

Wow. I look for to watching Schiff's VLOG on this one.

Not just Asian currencies, it's ALL currencies

The dollar is collapsing, finally, against all currencies. The Yen is coming back very strong, but so is the euro, the Australian dollar, the Swiss franc, the British pound, and just about everything else.

Peter Schiff and I are in complete agreement; this is the time to get into foreign currencies. Set up an account at Everbank.com, or HSBC (you can set up a Hong Kong account for foreign currencies) and protect what money you have left.

Zen, Just make sure you

Just make sure you have some silver and gold at your house.. physical metals.. if this thing gets to bad the banks will be shut down for a period of time..

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

I agree, but

If I have a 1 oz. gold coin, which is worth around $1,050 (give or take) how can I use that to buy gas? Or groceries? I don't think anybody here would know what to do with it. Silver coins might stand a better chance, but again, most cashiers would not have a clue about cashing it - and then get what? Dollars and cents for change?

But you raise a good point. Stocking up on supplies is a good idea in the meantime and have things to barter. I don't know when we will see hyperinflation, but the dollar will be around for a while, even though it will be nearly worthless.

Your right about having gold

Your right about having gold and being able to trade with it. Right now the only why to do so is through a dealer, who of course takes his share, worse than the tax man. Most cashiers have a hard time giving change without punching in the value on the computer. So expecting them to accept gold coins will require education. Why it is important to eliminate the legal tender laws and start educating. Would love to see silver trading on the open market. Gold on the other hand is probably best used for larger purchases and not necessarily for daily trades.

SteveMT's picture

zen: You are right!

Ergo, the fed has to do something. What can it do except raise interest rates and that means big time inflation headed our way. The alternative is for them to do nothing and that means the dollar sinks like stone instead of more slowly.

The other possibility when all else fails in the worst. Declare a war.

Steve - I think they want the dollar to sink so they can pay off

the debt with "zimbabwe" dollars.

"We have to spend money to keep from going bankrupt"
Joseph Biden VP , USA

It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people that pay no price for being wrong.
Thomas Sowell

yep, that's the dirty little secret

no one in D.C. is admitting.

"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."
dead banksters

"the only thing that keeps the banking system from failing is general ignorance about how the banking system works."