Rumors about the possibility of central banks intervention have always been a source of sharp moves in the foreign exchange market. Just last week, the market reacted heavily to a comment from, Cheng Siwei, the vice chairman of the Standing Committee of China's National People's Congress. He said that "China needs to counter the effect of the weak dollar on its $1.4 trillion stash of currency reserves by shifting a bigger chunk into alternate currencies." The market immediately interpreted this as a signal that China would buy the Euros and sell the dollars. Although Mr. Cheng is not the one who decides on China's ... (full story)