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China's onshore currency exchange started trading the Chinese yuan against the Canadian and the Australian dollar for the first time on Monday. The initial strength of the yuan against the two currencies was based on its near peg to the US dollar.
Analysts say that it will take some time before the yuan starts to trade more independently on the currency market. The move to expand trade in yuan is part of a plan by the Chinese regime to reduce its reliance on the US dollar when trading internationally in important commodities—like crude oil, natural gas, and iron ore.
Increasing the global power of the yuan is also part of a strategy to market Shanghai as a world center for international trade. Currency traders predict that the next currencies to be added for trade against the yuan will be the Singapore dollar and the Korean won.
