Bye $USD–China to start direct yuan trade with British pound

China will start direct trade between its yuan currency and Britain’s pound on Thursday, the country’s foreign exchange trade platform said, in another step in its push to internationalise the unit.

Sterling and the Chinese renminbi, the yuan’s other name, will be directly swapped from June 19 without using the US dollar as an intermediary, the China Foreign Exchange Trade System (CFETS) said in a statement Wednesday.

China has long had direct currency trade with the United States, and in recent years has added Japan’s yen, the Australian, New Zealand and Canadian dollars, Russia’s rouble and the Malaysian ringgit to the options.

Read more:

London Takes Lead Seizing on China’s Yuan Push as Trading Starts 

By clinching a deal allowing the direct exchange of the yuan for British pounds, the U.K. got the jump on European counterparts grappling to become a hub for the most-used currency in global trade after the U.S. dollar.

While four other nations had already signed such accords with China, the U.K.’s deal yesterday made it the first European country to do so. London has been competing with cities including Frankfurt to become Europe’s offshore yuan hub. Direct trading of the yuan-pound pair is scheduled to start today.


Previously, the Yuan-Sterling reference rate was calculated on the CNY/USD central parity rate, and the GBP/USD rate. As the 2 currencies can now be directly traded, the Yuan-Sterling rate will be set by the average prices offered by market makers before the opening of the interbank foreign exchange market. The move should help London’s bid to become a Renminbi offshore center.

The transaction volume of London’s yuan exchange market, which includes trading of spots, forwards, swaps and options, is expected to take off following the move.
[This] unlocks a great deal of potential for the investment community

Market watchers expect overall investor interest in yuan to pick up and help create a huge “Euroyuan” market the way the US dollar was boosted in its early years as a global currency.

“Given London’s dominant position in the global forex market and the UK’s sizeable banking sector, the potential for financial products would be enormous,” said ANZ economist Liu Ligang. “Direct conversion and the clearing facility will lay the foundation for London to nurture a Euroyuan market.”

Putin Advisor Proposes “Anti-Dollar Alliance” To Halt US Aggression Abroad

It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the “Holy Grail” gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine’s Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades.

However, “out of sight” may be just what Russia’s political elite wants. In fact, as VoR’s  Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country’s 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated “$200+ billion” in Russian capital outflows which Mario Draghi was warning about recently). Glazyev was also the person instrumental in pushing the Kremlin to approach China and force the nat gas deal with Beijing which took place not necessarily at the most beneficial terms for Russia.