Asia Likes Dollars, Dislikes Euros, For Now

Asian governments, including five of the seven holders of the world's biggest cash reserves, are snuggling closer to the U.S. dollar and cold-shouldering the euro. Japan, China, Hong Kong, Taiwan, and Singapore say they are delaying planned moves into euros because they believe the European monetary union has yet to be tested. Indeed, the euro has fallen against the dollar since its New Year's Day launch. Still, the large deficit the U.S. continues to run in its current account -- that portion of its balance of payments that includes imports, exports, payments for services, and foreign-investment earnings -- is expected to improve the euro's attractiveness eventually, prompting Asian central banks to buy the single European currency.

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