Is this a sign of concern about the US economy or is diversifying just good business? It's tough to be bullish on the US economy though the red flags are there for Europe as well. Investments in China are likely to be lower since their stock market has been cut in half since late 2007. The advantage in Europe is that it rarely sees the same highs or same lows as the US so could the driving factor is stability. Whatever the reason, this is not a vote of confidence from the world.
The report, published during the Asian day on Thursday, said one large sovereign fund in the Gulf had cut its dollar-denominated holdings from more than 80 percent a year ago to less than 60 percent, but gave no source.
The FT also said China's State Administration of Foreign Exchange (SAFE) had been looking to strike deals with private equity firms in Europe as a part of a plan to reduce its U.S. dollar holdings, citing people familiar with the matter.
The shift at China's SAFE was significant because it manages all of the country's $1.8 trillion in foreign currency reserves.
Traders said the U.S. dollar eased a little on Thursday morning as the report circulated, though investors have long suspected that sovereign funds would be inclined to trim their holdings given the long fall in the currency.
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