China’s U.S. bond shifts put greenback under geopolitical spotlight

News Snapshot:

As the trade war between the United States and China escalates, China is shrinking its holdings of U.S. bonds. The latest official U.S. capital flows data show that China’s stash of U.S. Treasuries and agency bonds in the first quarter of this year fell by just under $40 billion and $10 billion, respectively, on a valuation-adjusted basis. China is the world’s largest holder of foreign exchange reserves with a stash of $3.2 trillion at the last count in April. The currency breakdown is not publicly known, but experts reckon no more than 60% of that is in dollars. China may...