“Smart Trade Group” – TraderChat – (China Reiterates Currency Call)…

Added: (Tue Jun 30 2009)

Pressbox (Press Release) - ‘Smart Trade Group’: The People’s Bank of China has again called for the dollar to be replaced.

“Smart Trade Group”, the Asian-based broker, believes that renewed calls from China that the US dollar be replaced as the world’s reserve currency may fuel speculation that it intends to step up its efforts to diversify its enormous foreign currency reserves into alternative holdings..

Central bank chief Zhou Xiaochuan reiterated the call in a report from the People’s Bank of China (PBOC). China first expressed concern about the safety of its US dollar holdings earlier this year when the Prime Minister Wen Jiabao said he more “more than a little worried” about China’s US investments.

“Smart Trade Group” has long maintained its view that pressure would mount on the US dollar as the government tried to balance its domestic economic and political agenda with the needs of its creditors of which China is the largest.

This, a source close to “Smart Trade Group” suggested, could culminate in creditor nations seeking higher yields on the US Treasuries they buy or slowly but surely abandoning the dollar in favor of more stable assets like gold.

The “Smart Trade Group” source added that gold would continue to be a firmly held asset in its portfolio and maintain its position on the firm’s conviction buy list.