US Dollar Weakens as OPEC Lowers Treasury Holding

The US dollar fell today as the nations of the Organization of the Petroleum Exporting Countries slashed their holding of the US debt because the rising oil prices decreased their need for the US currency.

The Treasuries in holding of the oil-producing countries and the institutions representing nations of Middle East dropped 9 percent to $654.6 billion in the second half of the last year. Analysts expect that the selling of the US debt will continue.

Greg Anderson, the currency strategist at Citigroup Inc., explained the present situation:

When you have a shift of global wealth to OPEC producers, that group tends to hold more euros in reserves and they also tend to purchase imports more from Europe than the U.S. Crude oil above $100 is an almost an across-the-board negative for the dollar.

The stimulus program of the Federal Reserve and the anticipation of the next round of the so-called quantitative easing also continues to weigh down on the greenback. The dollar was the worst-performing major currency in the last six months.

EUR/USD traded near 1.3983 as of 1:04 GMT today after yesterday’s rise from 1.3937 to 1.3987. GBP/USD traded at 1.6165 after it jumped yesterday from 1.6068 to 1.6171. USD/CHF fell on the previous trading session from 0.9282 to 0.9241 and trades currently at about 0.8245.