Chinese Currency Renminbi Will Overtake UK Pound As World’s Third Currency in 3 Years

Chinese currency Renminbi is going to overtake UK Pound as world’s third currency in around 3 year. This is a predication being made by an economist.

The Chinese currency will therefore overtake the U.K. pound as the world’s number three currency (in foreign exchange volumes) in less than three years, according to Jakobsen. He sees a resurgence for the world’s second largest economy in the coming years.

“The one difference with China and the rest of the world is that they have a plan, you may disagree with the plan, but they actually do have a plan,” he said.

The internationalization of the renminbi will mean sovereign wealth funds will start to “play and act very aggressively,” Jakobsen added.

He predicts that China’s foreign exchange reserves of more than $3 trillion will start to be invested. With a sizeable chunk of China’s reserves being held in dollar-denominated assets, he added that this investment would be to the detriment of the dollar and U.S. bond markets.

So if you are a currency trader you should start thinking about trading Renminbi in the near future. The process has already started with IMF planning to include Renminbi as a reserve currency and giving it Special Drawing Rights (SDR). The rise of Chinese currency means the slow and steady demise of the Dollar and the British Pound.