Yesterday saw the US dollar fall sharply, then rise again, after comments from Seoul were interpreted that Asia was planning on selling its dollar reserves.

As there is already over $2 trillion held in Asia, with Japan the single biggest holding of dollar reserves in the region, then China, Taiwan, and South Korea the fourth largest holders in the world, the suggestion of Asia selling dollar reserves to buy into euros created a sense of alarm among traders.

After experiencing its single biggest fall for four months, Japan and South Korea both came out to state that although they were happy to diverse their reserves among different currencies, they were also happy to preserve existing dollar reserves.