LONDON, Jan 10 (Reuters) – Officials reviewing China’s foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, Bloomberg News reported on Wednesday, citing people familiar with the matter.
China has the world’s biggest currency reserves and is the biggest foreign holder of U.S. government debt.
According to the Bloomberg report, the sources said the market for U.S. government bonds is becoming less attractive relative to other assets. They also cited trade tensions with the United States as a reason to slow Treasury purchases, the report said.
Traders cited the report for a renewed rise in U.S. Treasury yields during European trade, with the U.S. 10-year bond yield rising to a new 10-month high at 2.593 percent. The U.S. dollar fell 0.6 against a basket of currencies for its biggest one-day drop in a month. (Reporting by Dhara Ranasinghe; editing by Sujata Rao)