China to Diversify (sell) its Dollar Reserves

Bloomberg is reporting that China has re-announced its intention to sell its dollars and put them in other currencies. Meanwhile, the dollar fell again:

The Dollar Index fell 0.8 percent to 79.84. The restatement of Governor Zhou Xiaochuan’s proposal in March added to speculation that China will diversify its currency reserves, the world’s largest at more than $1.95 trillion. Chinese investors, the biggest foreign owners of U.S. Treasuries, reduced holdings by $4.4 billion in April to $763.5 billion after Premier Wen Jiabao expressed concern about the value of dollar assets.

“Long-term concern about the dollar is something globally we’re all worried about,” said Eric Teal, who oversees $5 billion as chief investment officer at First Citizens Bank in Raleigh, North Carolina.

If you are wondering why China is selling its dollars, click here.