China reduces its US Treasury holdings for second month

Image caption,
The dollar has weakened significantly, making US assets less attractive for investors

China has reduced its holding of US Treasury bills for a second consecutive month, figures show.

It cut holdings by $4bn (£2.5bn) to $891.6bn in December, according to the US Treasury department. This follows sales of $11.2bn in November.

The move comes as analysts try to gauge the strength of the US economy's recovery and the outlook for growth and interest rates in coming months.

Despite the sell off, China remains the biggest holder of US debt.

The monthly data is considered to be one indicator of how easily the US can finance its national debt and budget deficit.

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