So there's been a lot of talk about the decline of the dollar over the past year. Yet, it's hard to know when you've really got a problem or just a lot of alarmists speaking in unison. (Though a lot of alarmists speaking in unison might be its own problem.) Some news out today might indicate that it's time to worry. How bad has the dollar's slide gotten? So bad that Asian central banks are intervening.
The Financial Times reports:
Traders said most of the Asian central banks had been buying US dollars, with the Bank of Korea among the most active following a round of intervention by Seoul earlier in the week.
Other central banks identified by traders as significant buyers of US dollars included Thailand, Malaysia, Taiwan and Singapore, which is a frequent market participant because of its managed currency regime.
In Hong Kong, the Chinese territory's central bank said it had injected HK$8.525bn into the financial system to prevent the currency from rising beyond its fixed trading band against the US dollar.
It is in Asia's interest to keep the dollar strong, since they export so many goods to the U.S. With the dollar is down 12% since March based on the Fed's currency index, those nations with export-driven economies must be worried. So worried that they're taking measures to stop the bleeding.