Goldman Sachs note that "U.S. dollar..........>

FOREX: Goldman Sachs note that "U.S. dollar reserve selling, in aggregate, was

more muted in April than in March. Switzerland actively accumulated reserves in

April, yet another indication of substantial FX intervention to weaken the Swiss

Franc. Hong Kong appears to have added to Dollar reserves in April, likely to

defend the USD/HKD peg. Overall, these results are consistent with i) the

gradual easing of funding and liquidity conditions throughout April and ii) a

potential return to USD reserve accumulation across most of the world's largest

reserve managers in the coming months. In fact, the Federal Reserve Bank of New

York's weekly custody data show the sharp decline in Treasury holdings since the

end of February has partially reversed over the past few weeks. As we have noted

before, if central banks begin accumulating Dollar reserves again as economies

recover and market stresses ease further, "reserve rebalancing flows"-to bring

the currency composition of their portfolios back to target levels-may weigh on

the Dollar versus other major reserve currencies, such as the Euro."