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Replying to Avatar Lyn Alden

Normally, the foreign sector sells Treasuries during a spike in the dollar index, in order to defend their currencies. Then, when the dollar index corrects back down, they re-accumulate the Treasuries that they had sold during the spike.

During this most recent dollar index correction, the foreign sector did not re-accumulate their Treasuries. Around the margins, it has been a more persistent (albeit still small) shift away from Treasuries.

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Smaug 2y ago

So if they don't buy more treasuries, what strategy will they use when the dollar spikes to defend their currency going forward?

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