FXTM information and reviews
FXTM
95%
OctaFX information and reviews
OctaFX
94%
XM information and reviews
XM
93%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
90%
HFM information and reviews
HFM
89%

Any alternatives to the greenback at the moment?


2 September 2020

The yuan isn’t going to unseat the U.S. dollar anytime soon — but the Chinese currency’s rising prominence has been seen in global reserves as well as international trade. Much has been said about the U.S. dollar losing its dominance as the world’s reserve currency, as it weakened sharply in recent weeks. Still, analysts rejected the idea, saying there are no viable alternatives to the greenback at the moment. Its two closest competitors — the euro and the Chinese yuan — have their shortcomings, they said. However, the Chinese yuan is set to gain more prominence, and indeed its global usage has gradually gone up owing to the country’s growing economic influence, analysts pointed out.

Factors such as the increasingly heated tech war between the U.S. and China, as well as Beijing’s growing influence by way of its Belt and Road initiative, are also crucial in the yuan’s reach for dominance, said Sven Schubert, senior investment strategist at Europe-based Vontobel Asset Management. The currency is now the sixth most used currency in international payments, and is used to settle about 20% of China’s trade. The share of the RMB in global reserves has also crept up — from 1% in 2016 to around 2% currently, according to data from the International Monetary Fund.

The Chinese currency has been strengthening in recent weeks too. The onshore yuan traded at its strongest level in nearly 16 months on Tuesday — at 6.8239 per dollar, according to Reuters. The offshore yuan was at 6.8236, a high since July 2019. Around 50% of global trade contracts are still quoted in the U.S. dollar, despite the country accounting for only about 12% of global trade, Schubert said, citing an IMF study this year. Economic importance is not the only determining factor of whether a currency can hold sway, Schubert said, adding that the battle for technological supremacy is also key. Washington has come down hard on Chinese tech companies recently — from sanctions on phone maker Huawei, to executive orders against short video-sharing app TikTok and messaging app WeChat. The tech duel has also led to a splitting of the internet – the Chinese-focused internet versus the American-centric one.

#source

Share:


Related

The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast
The Downfall of Euro in 2022: the Analysis of its Reasons, the Current Situation, and the Objective Forecast

Before getting down to analyzing why Euro reminds of a mafia victim in cement shoes falling off a Chicago bridge, allow us to open it up with a meme joke that best describes this whole ordeal...

31 Oct 2022

XAU/USD juggles around $1,710 as investors await US NFP
XAU/USD juggles around $1,710 as investors await US NFP

Gold price (XAU/USD) is displaying topsy-turvy moves in a narrow range of $1,709.35-1,713.42 in the early European session. The precious metal is displaying a lackluster performance...

7 Oct 2022

Positive mood stalls on the “pivot” trade
Positive mood stalls on the “pivot” trade

USD slid against most of its major peers. The DXY closed a tick above its lows of 110.05. Resistance is at 110.76 while next support is 109.29. GBP gained for a sixth session in a row, a winning streak not seen since April 2021...

5 Oct 2022

OctaFX glances at current economic shifts - the good, the bad, and the strange
OctaFX glances at current economic shifts - the good, the bad, and the strange

Pandemics and health crises, political tensions, geopolitical tension flashpoints popping up, Western sanctions on significant European and Asian economies, and grave tensions between...

3 Oct 2022

The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022


Editors' Picks

IronFX information and reviews
IronFX
88%
FXCM information and reviews
FXCM
87%
NordFX information and reviews
NordFX
85%
MultiBank Group information and reviews
MultiBank Group
84%
Vantage information and reviews
Vantage
83%
FP Markets information and reviews
FP Markets
81%

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.