The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance. [1]
As usual, Ambrose is the guy who sums it up [1] while Tim was busy trying to stuff the toothpaste back into the tube.[2]
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[1]: "US backing for world currency stuns markets", by Ambrose Evans-Pritchard, Telegraph, March 25, 2009.
US Treasury Secretary Tim Geithner shocked global markets by revealing that Washington is "quite open" to Chinese proposals for the gradual development of a global reserve currency run by the International Monetary Fund.
[2]: "U.S. Vows To Sustain Dollar’s Dominance: Geithner Defends Currency’s Role", by Tomoeh Murakami Tse, Washington Post, March 26, 2009.
NEW YORK, March 25 — Treasury Secretary Timothy F. Geithner said Wednesday that the United States would do whatever it takes to make sure the dollar would remain the world’s dominant reserve currency, clarifying comments he had made earlier in the day that had caused the greenback to fall against major currencies.
"I think the dollar remains the world’s dominant reserve currency," Geithner said during a question-and-answer session at the Council on Foreign Relations here. [hopefully Brad asked some tough questions] "I think that’s likely to continue for a long period of time. And as a country, we will do what’s necessary to make sure we’re sustaining confidence in our financial markets, and in the productive capacity of this economy and in our long-term fundamentals."
