Money and Metals

The Forbes site is reporting on a development for the US dollar. "The dollar was lower against major currencies, particularly against the euro, on reports that Venezuela may be diversifying its reserves away from the dollar."

"The reports follow news yesterday that Venezuela has transferred 20 bln usd worth of its reserves to the Bank for International Settlements in Switzerland. Domingo Maza Zavala, the head of Venezuela's central bank told El Nacional newspaper that it seems appropriate to increase the country's euro holdings and cut the dollar holdings given that the dollar has weakened against the euro."

"The euro has risen sharply against the dollar overnight and this morning, rising well above the 1.20 usd level and pushing towards 1.21 usd. 'Justification for the fall in the dollar centres around reports that the Central Bank of Venezuela has shifted up to 50 pct of its operational foreign exchange reserves beyond US jurisdiction and placed them in the custody of BIS, Basel,' said HBOS currency analyst Steve Pearson."

"He noted that previously Venezuela has suggested it held only a small amount of non-dollar reserves, and if it were to move in line with the largest emerging market nations, which currently hold 40-45 pct of reserves in non-dollar currencies, it would imply a one-off sale of around 10 bln usd."