"Many have blogged/commented on the advantage first movers will have in exiting the USD while it's value is mostly intact."

"Meanwhile, someone is doing their best to push the dollar back toward 80 on the index. It has picked up a hundred bps in the past two days, as far as I can see for no good reason."

This is a long term trend, the time to get out was in 2003 for those who saw the writing on the wall, I expect after this dead cat bounce it's getting it will resume the downward spiral and with more FED rate cuts it's a certainty, the only manipulation going on is the same one as always Japan.

"Countries are starting to dump the greenback because the US has been exporting it's inflation."

True, but they also have difficultly buying US assets other then more worthless paper, there is rising protectionism sentiment in congress which will undoubtedly be joined by the White House in the next election, and they are losing purchasing power because we have a FED that is printing money as fast as it can and a goverment that thinks we can spend our way to prosperity. What's not to like want to buy some dollars?

Kazakh banking system under threat

FT.com / Emerging Markets - Kazakh banking system under threat

So, lets see the forward position...US dollar is no longer the safe bet. Nice!
Gold will move higher. Euro will rock. (G7 in a few days a few strong words, I am sure). Neat!!

A run on currency? My bet the Canadian and Austrian dollar will be up a lot!

G7 in a few days a few strong words, I am sure).

The G7 is basically run by the US, they haven't done squat in 7 years and this is seen by the currency traders as a boondoggle. Non-event.

In the short to medium term (weeks?) it looks like the dollar is now oversold and will bounce with a decline in gold. The question is whether to use the pullback as a buying opportunity for gold and miners.

I think maybe the link doesn't work. Here is the story.

No more US dollars in Iran's oil deals
Wed, 03 Oct 2007 05:27:36

Deputy Director of the National Iranian Oil Company, Mohammad-Ali Khatibi, says that "Iran has halted oil transactions in US dollars."

"Iran is selling about 85 percent of its oil in the non-dollar currencies, including 65 percent in euro and 20 percent in yen", Khatibi was quoted by the SHANA news agency." The other 15 percent of Iran's oil exports will shift to other creditworthy currencies except the US dollar."

The UAE dirham has been mentioned as a possible substitute for the US dollar.

The main reason behind the decision has been fluctuations in the US dollar's parity rate against other currencies and the depreciation of its value since 2004.

Iran's foreign currency reserves held in banks abroad have risen by 37 percent over the past year to an equivalent of 65 billion dollars as of the end of June 2007, the Central Bank of Iran said in September.

Congratulations Vietnam - about time. China should follow if they have any senses.

The problem is was and will be (until currencies sufficiently rebalance) that we run a huge current account deficit... something like a trillion dollars a year.

Blame the Fed, Treasury, MBS traders or anyone else that you want - it's pointless, they aren't the cause just the symptom - the problem is that imbalance has to cure and the only way it happens is via dollar weakness.

Asian CB's have been forcing their currencies lower vis-a-vis their neighbors for a long time... Vietnam wants a weaker currency vs China, China vs Japan, Japan vs Korea... so on... so as to maintain their export engine even in the face of these huge deficits the US is running.

It has to end. We have to buy less from them and they have to buy more from us. It's really that simple.

They can buy our MBS, Treasuries, equities, RE, ag commodities or mfg'ed products... doesn't matter from a balance perspective but they have to buy something OR stop selling us huge amounts OR accept weaker and weaker dollars.

This was inevitable and necessary and a very good thing... even if it means the price you and I pay for gas and stuff at Best Buy will increase (maybe increase a lot). It should have been happening YEARS AGO.

Oh and to those folks complaining they should get paid in gold or euros... fine just as long as the pay is a LOT less... you should get paid in euros approximately what your peers in Europe get in Euros (usually about half what Americans have been getting) or what Japanese get in yen (also usually less).

Tat is what this currency rebalancing is trying to correct... remove the dollar free lunch... about freaking time.