Tag Archives: Currency

Do central banks rebalance their currency shares?

Do central banks rebalance their currency shares? The answer matters because the dollar’s predominant role in large official reserve holdings means that widespread rebalancing requires central banks to buy (sell) a depreciating (appreciating) dollar, stabilising its value against other major currencies. We hypothesise that larger reserve holdings have led central banks to approach their investment more systematically and to make ... Read More »

Currency wars: Where can traders go from here

After a week of collapsing asset prices, moves from central banks to weaken their country’s currencies have proved frustratingly short-lived, leaving analysts scratching their heads as to what policymakers can do next to intervene. Normally when a country loosens monetary policy and cuts their interest rates, investors pull their money out in search of higher yields elsewhere. This pushes down ... Read More »