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Keep in mind the timing. President Obama is set to visit China next week amid a series of high profile meetings with senior officials.
China’s central bank on Wednesday acknowledged the case for a stronger renminbi, days ahead of the arrival in Beijing of US president Barack Obama for talks expected to highlight mounting international concern over Chinese currency policy.
http://ftalphaville.ft.com/blog/2009/11/12/82821/china-hints-at-stronger-renminbi/
US officials like Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke have repeatedly reiterated a strong dollar policy. However, what they do not say is how that will be accomplished.
Ironically, any correctional moves in the dollar will come about as a result of foreign intervention and not by any actions by the US, which continues to gleefully print its way out of trouble. This means that the US is currently enjoying the best of both worlds as it can truthfully say that its actions are resulting in a stronger dollar - just through the indirect means of having other nations bail out their export sectors by buying short term Treasury obligations.
Who would've thought that Russia (of all places) would be unhappy about an appreciating ruble? After all, earlier this year, President Putin had to publicly make several comments about arresting the Russian currency's slide.
Thailand, South Korea, Russia and the Philippines have been snapping up dollars this week in order to hold down the value of their currencies, traders said Wednesday, as the U.S. currency wallowed near 15-month lows.
Experts estimate that some of the largest emerging economies may have spent as much as $150 billion on currency intervention over the past two months, judging from the growth of their international reserves, according to data from Brown Brothers Harriman. While that's not a huge amount in the currency markets, which have turnover of more than $3 trillion a day, traders pay keen attention to what the authorities are doing and where they are likely to intervene.
http://www.djnewsplus.com/article_ss/SB125800156391255684.html?param=cc
This begs another question. Is gold in a bubble?
