Forget carry trades, forget risk appetite: “Changes in the dollar correlate more closely to changes in international reserves than any other variable since 1999.” So China has “far more control over the price of the dollar than the US.” The US has little control over the dollar, especially treasury secretary Tim Geithner, in spite of his oft-stated desire for a strong dollar, agrees The Economist: “Yeah, right. I have a “strong man” policy under which I intend to become world heavyweight champion. I’m just not planning to do anything about it, like train or fight someone.” Read more
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