Yuan to supersede dollar as top reserve currency: Survey - News and Current Events | futures.io
futures.io futures trading

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events

Yuan to supersede dollar as top reserve currency: Survey
Started:February 27th, 2014 (10:13 PM) by kbit Views / Replies:106 / 0
Last Reply:February 27th, 2014 (10:13 PM) Attachments:0

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Thread Tools Search this Thread

Yuan to supersede dollar as top reserve currency: Survey

Old February 27th, 2014, 10:13 PM   #1 (permalink)
Elite Member
Aurora, Il USA
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
kbit's Avatar
Posts: 5,839 since Nov 2010
Thanks: 3,275 given, 3,321 received

Yuan to supersede dollar as top reserve currency: Survey

The tightly controlled Chinese yuan will eventually supersede the dollar as the top international reserve currency, according to a new poll of institutional investors.

The survey of 200 institutional investors - 100 headquartered in mainland China and 100 outside of it - published by State Street and the Economist Intelligence Unit on Thursday found 53 percent of investors think the renminbi will surpass the U.S. dollar as the world's major reserve currency.

Optimism was higher within China, where 62 percent said they saw a redback world on the horizon, compared with 43 percent outside China.

"As China's economic influence grows, the global importance of the renminbi will become magnified. Indeed, while for decades it has been a 'greenback world', dominated by the U.S. dollar as the world's primary reserve currency, many think a 'redback world', in which the renminbi enjoys premier status, is increasingly a possibility," the report accompanying the survey said.

This view was shared by European Central Bank Executive Board member Yves Mersch, who said on Wednesday that China's yuan is gaining importance in international trade and investment and might ultimately challenge the U.S. dollar.

However, skeptics of yuan internationalization argued that the renminbi will never be liquid enough across all asset classes to serve as a viable reserve currency, and that people will not trust the renminbi as a store of value.

Despite being a closely-managed currency, the renminbi's global clout has been rising steadily. By the end of 2013, the renminbi had become the second most used trade financing currency and ninth most used currency for payments globally.

Recent moves in the yuan have triggered speculation that the People's Bank of China is getting ready to widen its trading band - which would be a step towards liberalizing the Chinese currency. The yuan is currently allowed to rise or fall by 1 percent in either direction from a level fixed against the dollar each day by the country's central bank.

Ultimately, a greater role for the yuan would require China to liberalize its financial policies, including decreasing exchange-rate intervention, liberalizing interest rates and relaxing restrictions on capital flows.

Mark Matthews, Head of Research Asia at Bank Julius Baer, says recent weakness in the Chinese yuan could be a move executed by the Chinese central bank to shake out speculators.

Two-thirds of the respondents of the survey expect Beijing to complete its financial liberalization within ten years, with a majority expecting major reforms within five.

Financial liberalization in the mainland began in earnest after 2009, with the government's decision to allow cross-border trade settlement in renminbi, ease the process of listing offshore bonds and introduce the renminbi qualified institutional investors (RQFII) program.

The reforms, however, are still limited in scope, with strict quotas for how much currency can move across the border.

Last year, the government launched the Shanghai free-trade zone as a testing ground for financial reforms, including full yuan convertibility.

Yuan to supersede dollar as top reserve currency: survey

Reply With Quote


futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > News and Current Events > Yuan to supersede dollar as top reserve currency: Survey

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Upcoming Webinars and Events (4:30PM ET unless noted)

An Afternoon with FIO trader bobwest

Elite only

NinjaTrader 8: Programming Profitable Trading Edges w/Scott Hodson

Elite only

Anthony Drager: Executing on Intermarket Correlations & Order Flow, Part 2

Elite only

Adam Grimes: Five critically important keys to professional trading

Elite only

Machine Learning Concepts w/FIO member NJAMC

Elite only

MarketDelta Cloud Platform: Announcing new mobile features

Dec 1

NinjaTrader 8: Features and Enhancements

Dec 6

Similar Threads
Thread Thread Starter Forum Replies Last Post
China To Challenge US Dollar Reserve Currency Status Victory Trader News and Current Events 0 October 4th, 2012 10:57 AM
Dollar no longer primary oil currency as China begins to sell oil using Yuan Victory Trader News and Current Events 0 September 13th, 2012 10:51 AM
Zimbabwe Bashes US Dollar, Alligns With Yuan Quick Summary News and Current Events 0 December 1st, 2011 03:20 PM
Yuan expected to become major world currency kbit News and Current Events 0 June 7th, 2011 06:49 AM
Dollar Could Lose Up to 30% in Value as Yuan Strengthens Quick Summary News and Current Events 1 May 18th, 2011 03:24 AM

All times are GMT -4. The time now is 09:23 PM.

Copyright © 2016 by futures.io. All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts

Page generated 2016-10-22 in 0.08 seconds with 20 queries on phoenix via your IP