New Zealand PM English says US dollar likely to decline further, says he discussed US dollar with US Treasury Secretary Geithner, says Asian countries should not be worried about FX appreciation, but says he's concerned about the strength of his own currency and it's impact on NZ exports.
Thailand Finance Minister Chatikavanij says they have bought $15 bln in 2009 to slow US dollar descent, says China stressed APEC need to ensure no rise in protectionism, says no indication from China if or when a yuan revaluation will take place, and says weak yuan forces Asian central banks to curb their own currencies to maintain competitiveness. "Quite clearly, all Asian central banks have found it necessary to intervene and it's costing us."
World Bank President Zoellick says value of currencies reflect savings imbalances, says the US dollar fall is natural for it to fall after it rose due to safe haven demand, says that US dollar will be hard pressed to rebound, says that a more flexible Chinese yuan would be useful.
This is exactly the pressure that I've been forecasting from the rest of the world on China.
The US is not going to actively intervene to support the US dollar, but merely try to shape it's domestic policies to ensure a strong dollar.
A free floating currency acts as a stabilizer to an economy.