Currency markets turn on U.S. dollar

PBOC official Zhou Hai expressed his opinion that the yen and the euro should be increased in foreign reserves around the world. Even though he continued to say that the dollar should remain the global reserve currency of choice, he did point out that other currencies should also enjoy additional prominence.

The reasoning behind this is that China has increased its trade with Japan and Europe. With China diversifying away from the U.S., it only makes sense for foreign reserves to do the same as well, according to Hai.

He was quick to point out that the statements were his own opinion, and not an official PBOC position. But the fact that this is one more prominent voice calling for some decline in the influence of the U.S. dollar has forex traders wondering how long the rest of the world will support the greenback as the global reserve currency.

See Also

• Where is the U.S. Dollar Headed in Forex Trading?
  Trends on the currency markets

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PBOC Official Calls for Increase in Yen, Euro in Foreign Reserves