This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

10 Takeaways From the IMF's COFER Report

7. In Q4, the dollar's biggest moves were against the European currencies. The dollar appreciated against both the euro and the Swiss franc over 4%. Sterling declined nearly 1% and the dollar advanced 1.4% against the yen.

8. After adjusting for valuation swings, the key takeaway is that the large share of the reserve accumulation in dollars reflects currency strength, rather than accumulation. In fact, emerging and developing countries reduced their holdings of USD -- though it is likely that EM reserve managers reduced their holdings in part to stabilize their own currencies through intervention.

The Bank of Japan's record currency intervention, at $118 billion, also boosted demand for the dollar. Given the rise in USD holdings were $49 billion, this indicates that outside the BOJ reserve managers diverted their share of holdings out of USD.

9. There is a clear difference of reserve preference between the advanced industrialized countries and EM countries. The former continues to hold a larger share of its accumulated reserves in dollars (66%) than the latter (57%). The absolute share is also higher. However, the recent pace of accumulation is also higher in the industrialized countries, when compared to the developing countries, due to the record BOJ intervention. This was partially offset by the roll-off of Swiss National Bank swaps used to inject liquidity. However the change in the industrialized countries claims in USD stems largely from the operations of the BOJ and SNB.

10. The claims in other currencies continue to increase. Indeed, both advanced and developing countries stepped up their purchases of other currencies. The pace was higher in developing countries, as developing countries purchased nearly $18 billion in other currencies. Valuation is also less of a constraint here. This suggests that the moves in this category are likely to be conscious decisions to diversify currency holdings, with EM countries accounting for roughly 90% of the recent change.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs