It's interesting, a few weeks ago a Chinese "banker" and "politician" made negative comments about the $US that caught headlines and threw the currency markets into a short-term tailspin and that fueled speculation that the dollar was going to continue to decline.

Last week, the deputy governor of PBoC said the $US will continue to be the main currency in its reserves because that's what China needs to trade. This isn't some noname, it's the deputy governor of China's central bank. And quite interestingly his comments mirror what I've said about China's currency reserves reflecting their need for trade. Unfortunately that article is now "locked" on the Globe's website but the intro says "The U.S. dollar will remain the anchor currency of China's massive foreign reserves despite suggestions that they were too heavily skewed toward the weakening greenback, a senior Chinese central bank official said yesterday."

Then today here's an article from the Governor himself arguing that China wants to see a stronger dollar.

The easiest way China could influence a stronger dollar is by letting the yuan APPRECIATE against the euro and other world currencies rather than making it depreciate against them and this is what we will eventually see but who knows when. Also interestingly you had the CEO of Airbus say that the low $US is threatening the very survival of Airbus. Damn those cheaper American exports!!