The weak US dollar is wreaking as Citigroup (NYSE:C) notes, Asian countries like Indonesia, Philippines, Taiwan, Thailand, Malaysia and Singapore have been snapping up US dollars as a move against their major competitor China.
Increasing strength of the currencies of the smaller emerging markets has been squeezing margins and profits of companies in the region, as the pegged Chinese currency moves in step with the greenback.
The acquisition of US dollars is a defensive step by these countries in order to maintain competitive exchange rates to compete with their exports.
Although financial media has focused on this recently, it has in fact been going on for quiet some time.
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