China Makes More Loud Noises About Not Buying As Many Dollars

A Bloomberg report about China diversifying its holdings in favor of Euros and Japanese assets is getting a fair amount of attention today.

It seems that a former advisor to the PBOC was dispatched to convey to Europeans that China remained confident in the euro, and that it was actually buying a lot of European debt (not to mention Japanese assets), while slowing its purchases of dollar assets.

What's it mean? Well for one thing, you have to figure that if China is talking about these moves now, then the big moves already happened. After all, it's not going to let the world front-run it. Beyond that, it's not interested in destabilizing dollar assets, as that's still the big chunk of its portfolio.

But obviously it would like to see a stronger, stable euro than what we've seen most of the year.

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