Forex News : "Fears over US profitability have now been compounded by the threat of new government supply, given that an increased line of credit with the US Treasury was the first point in Paulson's rescue plan for the GSEs," says ING forex strategist Chris Turner. "The sheer size of the GSEs mean that a government support package is the only option. That may be the final straw for some FX reserve managers who hold around $1 trillion in US Agency securities and may be forced into diversifying into Europe, no matter how weak the USD already is."
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