A longtime source of euro support is drying up, this strategist says.
Long ago, back before the euro zone debt crisis, central banks around the world used to keep their currencies in check by buying U.S. government bonds. Many, especially emerging market central banks, would then turn and sell as much as half of their dollar holdings for euros - a sizable source of support for the common currency.
What a difference a year makes.
Gregory Anderson, a currency strategist at Citigroup , has looked at reserves data from a good-sized sampling of central banks, and he found, as he told clients, that "the pace of foreign official purchases of U.S. government bonds has ground to a halt." That's a dramatic change from the past ten years, when by his calculations, foreign central banks added $2.7 trillion in U.S. government bonds.