Dollar continues to head south
The US dollar’s slide continued against the euro and sterling on Wednesday, on the back of alarming new comments from one of China’s senior politicians.
Cheng Siwei, vice chairman of the standing committee of the National People’s Congress, spooked investors by suggesting that China could profit from appreciating strong currencies to offset the depreciation of weaker currencies – generally assumed to be a direct reference to the US dollar.
His observations, which he later stressed were not made in an official capacity, follow data showing that China’s holding of US bonds and notes continues to fall.
Despite the hasty back peddling from China, traders pushed the euro above $1.47 for the first time, while sterling moved over the $2.10 level to reach a fresh 26-year high.
