To all the fresh-faced dollar bulls out there, following your favourite doomsaying long-dollar gurus, watch out for this.
China is set, yet again, to start trading dollars for hard assets en masse. This is despite claims that the country already has too much in the way of hard assets. That’s how commited they are to this diversification (after all, it’s not like there are any other paper currencies to move into.
Telegraph UK: On Wednesday, traders claimed the Chinese Ministry of Commerce recently said that the country should increase its imports of commodities for its strategic reserves at an “appropriate” time. Dealers took this as a hint that the country could start buying in the New Year.
According to brokers, the reserve targets are said to be 1m tons of aluminium, 400,000 tons of copper, 400,000 tons of zinc, and 20,000 tons of nickel, as well as the equivalent of 90 days’ oil consumption.
As a result, base metal producers peppered the leaderboard. Eurasian Natural Resources Corporation climbed 33 to 901p while Rio Tinto perked up 156p to £32.96.