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Forex Forum |Forex | Forex Trading | Currency Trading > FX Strategies > Forex Journals » EM central bank diversification selling of USD
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Old 10-21-2009, 11:38 AM   #1 (permalink)
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Post EM central bank diversification selling of USD

Reserve growth is a function of the US C/A & capital inflows to EM AND contingent on a policy decision to intervene

Capital flows are a function of deviation from benchmark and growth in AUM

EUR-USD up threshold is around $25bn pcm. This requires reserve accumulation of around $75bn pcm.

This would become difficult to achieve as US trade gap converges on $20bn per month and investor appetite for EM becomes satiated.
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