Inflation continues to surge in China as a report showed consumer prices jumped 5.3% in April, putting exchange traded funds that track its currency, the yuan, in focus Wednesday.
U.S. officials will put pressure on China to let the yuan rise more quickly as Beijing may take additional steps to fight inflation, The Wall Street Journal reported earlier this week. In nominal terms, the yuan has risen about 5% against the dollar since June, according to the report.
HSBC has ranked the currency as one of the top five in the world.
Currency ETFs such as WisdomTree Dreyfus Chinese Yuan (NYSEArca: CYB) are gaining steam. The currency has outranked the British pound and is one of the three contenders for the international trade settlement currencies in the latter half of this year, says Caixin for CNBC.
According to the report from HSBC, the top five settlement currencies for the second half of 2011, will be the US dollar, the euro, the Chinese yuan, British pound and Japanese yen, respectively. This research includes 6,000 trade companies within 21 global markets.
Ouyang Bosi, head of the Trade and Supply Chain Department of HSBC Bank (China), said the bank is planning to enhance its yuan business services in overseas markets to meet the growing demands for cross-border yuan trade settlement.
The weaker U.S. dollar has helped boost the yuan to trade at one of its highest levels in 20 years, says People’s Daily Online.
Tisha Guerrero contributed to this article.