“Steve Hanke, an economics professor at Johns Hopkins University in the United States, agreed that international action, as well as expansionary fiscal policy in Japan and Europe, were needed to help put a floor under the dollar.

Countries including China and Middle East nations that have large holdings of dollars in their reserves should pledge not to talk about diversifying their portfolios while action is being taken to stabilise the U.S. currency, Hanke told the conference.

Gulf countries in addition should stop talking about de-pegging their currencies from the dollar.

“It’s unproductive and creates a great deal of short-term volatility in the dollar,” he told the Credit Suisse Asian investment conference.

Adams said the dollar was likely to remain under pressure for the next few months because of uncertainty about when the U.S. business cycle will bottom out and how far the Federal Reserve will cut interest rates.

But he said the currency would find its footing, as the American economy is still fundamentally stable and the United States is one of few countries that will be able to keep absorbing huge global capital flows….”

More here from Reuters at GATA.org