Dollar slides on China forex diversification rumors

The US dollar tumbled against the euro on Wednesday following reports that China might diversify its foreign exchange holdings away from the US currency. Having sat at 1.4555 to the dollar on Tuesday, the euro peaked at 1.4731 before slipping back to 1.4634 in the evening, AFP reported. The dollar also hit a 26-year low against the British pound and a record low against the Canadian dollar, as well as falling substantially against the Japanese yen. The movement was sparked by remarks by Cheng Siwei, vice chairman of the National People's Congress, that strong currencies ought to be given greater weight in China's exchange reserve structure. China's foreign exchange reserves stood at US$1.43 trillion in September, 70% of which was said to be held in US dollar-denominated assets.