Dollar sells off as China lets the yuan rise

[pscot]

http://www.marketwatch.com/story/asia-central-banks-intervene-as-currencies-rally-2011-04-21

SINGAPORE (MarketWatch) -- The dollar continued to sell off sharply in Asia Thursday, prompting central banks in South Korea and Malaysia to try to curb the surge in their currencies to long-term highs by intervening for the second day running.

South Korean authorities also said they will inspect foreign-exchange transactions at banks, focusing on activity in the overseas non-deliverable forward market. The move comes as heavy dollar selling by offshore players, largely via the NDF market, has pushed the Korean won to multi-month highs in recent weeks.

China fixed the yuan at another record high against the dollar, setting the tone for Asian trading where sentiment was also given a boost by upbeat U.S. economic data and a strong earnings-driven rally on Wall Street. Strategists said authorities are trying to smooth sudden market moves, but likely won't stand in the way of the broad appreciation trend in Asian currencies

-------

The actions came as the U.S. dollar took a beating across the board, falling against the euro and other currencies. Commodity-linked currencies soared into rarely-seen territory. The Australian dollar hit a 29-year high of $1.0760, while the U.S. dollar touched C$0.9482 against the Canadian Loonie, a level not seen since 2007.

The U.S. dollar fell to a fresh record low against the Singapore dollar, which has paced the gains in Asian currencies, reaching a low early Thursday of S$1.2358.

more

[roamer65]

1. I smell a dollar crisis coming.

[westerebus]

2. I smell a rate hike.

Twenty five basis points and the USD stops falling, market moves up with out QE pump, the inflation boogie-man under the bed makes an appearance on CNBC, metals go neutral, the Bernank smiles his knowing smile.

[roamer65]

3. .25 won't matter one bit.

Maybe one day down on the metals market. Metals usually do not start a major decline until interest rates reach the TRUE rate of inflation. That inflation rate is somewhere between 10 to 15% right now.

.25% money is still insanely cheap money.

[westerebus]

4. Insanely cheap.

The FED's got to start somewhere. Quarter point is a start.

Metals go neutral, not a decline, they slow down.

Food and fuel not in the CPI, as you know.

To get a CPI bump for a COLA raise, the FED rate will need to rise.

At .50 % FED rate still no blood, no foul for the TBTF.

Change the expectations in (crime) mentally.

Elections coming.

Sheep shearing season by any other name...