The IMF has released the Q3 2014 FX reserve data, and there are several themes that shine through:
1. Total FX reserves fell from $12.0trn to $11.7trn q/q.
2. The USD is the reserve currency of choice. Allocations to the USD
were the only ones to increase, and were up 0.6% q/q to $3.9trn
and account for 62.3% of allocated reserves. We see this as a long‐
term USD positive trend.
3. The EUR is falling increasingly out of favour, with allocations falling
8%q/q to just $1.4bn, the lowest level since Q4 2011. EUR reserves
account for just 22.6% of total allocated reserves. We see this as a
long‐term EUR negative trend.
4.Allocations to currencies like AUD and CAD were down, but immaterially so, with 1.9% of allocated reserves held in each of AUD and CAD.
We had expected a more positive shifts.
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