The US dollar is the world’s reserve currency, the representation of US economic might on the global stage and the de facto currency unit for the overwhelming majority of financial assets.
A popular argument made by protectionists is that undervalued foreign currencies foster trade deficits, lower employment and are therefore harmful to the domestic economy, such as that of the United States, which is currently enjoying a relatively high dollar value. But are Americans really made poorer by their high-flying dollar?
In June, two European countries welcomed two Chinese banks as their official clearers for renminbi-denominated trades. In the UK it was the China Construction Bank and in Germany the Bank of China, respectively the second-largest and the largest Chinese financial institutions designated by Beijing to act as renminbi-clearers.