Backing the greenback

Forex markets: central banks

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For some time now, foreign exchange traders in Asia have been positioning themselves for a major realignment of the US dollar against regional Asian currencies. They have been encouraged by the long-term negative outlook for the greenback as a result of the United States’ worsening current account deficit and by the difficulty a weak US dollar creates for Asian central banks in the management of their US dollar-denominated forex reserves.

So strong is this view, it has led bond and forward marke

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