Thursday, October 8, 2009

Banks step in as US Dollar tumbles

Banks step in as dollar tumbles
Dollars
The dollar fell to a 14-month low against a basket of currencies

Asian central banks have intervened in the currency markets in an attempt to slow the slide of the US dollar.

Asian countries are worried about their export industries, which would be hurt by a weaker dollar.

Central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency, traders said.

As signs of economic recovery begin to emerge, traders have switched from the traditionally "safe" US dollar to buying other currencies.

A fresh wave of dollar-selling may have led to the banks' intervention.

The dollar fell to a 14-month low against a basket of currencies on Thursday.

Analysts believe that other countries have also intervened.

"It was reported earlier this morning that Russia was one of at least six central banks buying dollars," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon.

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