Saudi Forex Reserves Reach $250 Billion

By some measures, Saudi Arabia’s reserves are the fastest growing in the world. The country’s reserves recently crossed the $250 Billion threshold, and are now growing at a pace equivalent to nearly 40% per year. The source of the reserves should be a mystery to no one: oil. Oil prices have surged over the last five years, bestowing a windfall of profits to the entire Middle East region. Plus, as summer gets underway, oil prices are sure to climb further, which will ensure continued growth in Saudi forex reserves. Fortunately for the US, the majority of the world’s oil contracts are settled in USD, which means the boom in oil prices has actually stabilized the USD, despite its contribution to the US trade deficit. In addition, Saudi Arabia is one of the world’s most reliable investors in US capital markets, which means Dollar bulls can breathe a cautious sigh of relief that reserve “diversification” will probably be given short shrift by the Sauds

US Dollar Strong in Monday Asian Trade

Reports from Tokyo indicate that the US dollar is holding steady in Asia as of Monday morning. After receiving promising reports from the west, recent fears about the US credit problems have alleviated and risky trades have resumed in Asia. Since then, the dollar has strengthened considerably. The Philippine Star reports:
The better US economic news slightly pared back market expectations that the US Federal Reserve will cut its benchmark interest rate next month, dealers said.