Reply #75: Dollar Falls Sharply in Asian Trading

[Jemmons]

Monday April 17, 5:36 am ET
Dollar Falls in Asian Trading on Media Reports Suggesting China May Cut Treasury Holdings

TOKYO (AP) -- The dollar fell against the euro and yen in Asia Monday on a media report suggesting that China might reduce its purchases of U.S. Treasuries, and amid speculation that U.S. interest rates may have peaked.

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The U.S. dollar fell as low as 118 yen at one point before trading at 118.28 yen in Tokyo midafternoon, down 0.36 yen from late Friday in New York. The euro rose to $1.2178 from $1.2108.

Cheng Siwei, vice chairman of the Standing Committee of the National People's Congress, was quoted in a Chinese state-owned newspaper Monday as saying that China should cut the amount of U.S. Treasury bonds it buys.

He said China should channel the money into buying more U.S. goods, which would cut its politically sensitive trade surplus, the China Securities Journal reported. Cheng made a similar remark earlier this month to a Hong Kong newspaper, prompting the central bank to say his comments didn't reflect its official position.

China has $875.1 billion in foreign currency reserves, much of that money invested in U.S. Treasuries. Reducing those purchases could undermine the dollar.

http://biz.yahoo.com/ap/060417/dollar.html?.v=1