Central banks flush with record reserves are increasingly snubbing dollars in favor of euros and yen.
Policy makers boosted foreign currency holdings by $413 billion last quarter, the most since at least 2003, to $7.3 trillion, according to data compiled by Bloomberg. Nations reporting currency breakdowns put 63 percent of the new cash into euros and yen in April, May and June, the latest Barclays Capital data show.
This doesn't put the same pressure on the dollar as panic selling out of the dollar, but it is not a positive.
The big question is how will Treasury find funding for the huge money raises in the future, if there is not substantial buying by foreigners?
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