16 Jun 2015
Greenback eclipsed by rise of Yuan - BBH
FXStreet (Guatemala) - Analysts at Brown Brothers Harriman touched on the doomsayers claim that the role of the dollar is being eclipsed by the rise of the Chinese yuan.
Key Quotes:
"Others see the demise of the dollar and some countries, like Iran and Russia, selling oil in other currencies than the greenback."
"These all high profile developments, but they are not what they may seem. The yuan is still a relatively small currency, according to SWIFT. The transactions on SWIFT remain highly concentrated in dollars and euros."
"China's numerous swap lines lie largely dormant. Its own Special Administrative Region (Hong Kong) accounts for much of the yuan-invoiced trade flows. Iran and Russian oil sold for other currencies beside the dollar constitutes a relatively small part of world trade or what economists refer to as the transactional demand for dollars."
"There is still not significant rival for the dollar as a reserve currency, a transactional vehicle or a unit of account. Yet a compelling alternative has always stuck us as an unlikely scenario to topple the dollar. Instead, the abdication may be the more profound and insidious threat."
Key Quotes:
"Others see the demise of the dollar and some countries, like Iran and Russia, selling oil in other currencies than the greenback."
"These all high profile developments, but they are not what they may seem. The yuan is still a relatively small currency, according to SWIFT. The transactions on SWIFT remain highly concentrated in dollars and euros."
"China's numerous swap lines lie largely dormant. Its own Special Administrative Region (Hong Kong) accounts for much of the yuan-invoiced trade flows. Iran and Russian oil sold for other currencies beside the dollar constitutes a relatively small part of world trade or what economists refer to as the transactional demand for dollars."
"There is still not significant rival for the dollar as a reserve currency, a transactional vehicle or a unit of account. Yet a compelling alternative has always stuck us as an unlikely scenario to topple the dollar. Instead, the abdication may be the more profound and insidious threat."