Kuwaiti revaluation may signal GCC re-pegging (More Trouble for the $)

[JCMach1]

In a move which some analysts suggest may be the precursor to a collective realignment by the GCC currencies, Kuwait revalued the dinar yesterday, allowing a 1 per cent appreciation against the dollar.

A central bank spokes-man confirmed the decision to Reuters, sparking a rally in regional currencies and intense market speculation that Saudi Arabia, the world's top oil exporter, would follow suit.

Responding to the news in a research note, Standard Chartered economist Steve Brice remarked, "It is absolutely in line with our call for greater flexibility in the region."... The dollar's current slide against other international currencies, however, as well as its further weakening in terms of key market benchmarks gold and oil, may be making a review of that position more urgent... A US Treasury paper in March highlighted the scale to which a trebling of world crude prices since early 2002 has boosted the earnings of the oil-exporting nations. It said those countries now needed to play a role in unwinding those gaps... http://gulfnews.com/business/Economy/10039398.html

[cliss]

1. The oil countries are getting tired of having their

bank accounts say "U.S. $$dollars. They are tired of watching the value of their porfolios go down, down, down. As long as the Petrodollar goes down in value, their holdings are worth less.

They want to get out of the dollar and diversify into Euros, renminbi, rupees, dinars, whatever.

Bill Gates: "That old dollar, she is going down".