Another Sign US Dollar Losing Reserve Status

From Marketwatch:

China, Canada to expand use of Yuan in trade, investment

Under the agreement, reached during a visit to Beijing by Canadian Prime Minister Stephen Harper and announced by both sides on Saturday, the People’s Bank of China will designate a clearing bank in Canada for transactions in the yuan—the first in North America and a key step in boosting the use of China’s currency. China also granted Canadian financial institutions a 50 billion yuan quota to invest in Chinese capital markets, according to statements from the Canadian government and the PBOC.

The swap accord would allow the two central banks to lend each other up to 200 billion yuan and 30 billion Canadian dollars, the PBOC said. It said the agreement would be in effect for three years.

China is promoting greater use of the still-tightly managed yuan in the world economy, aiming—Chinese economists say—to eventually to make it a main reserve currency alongside the U.S. dollar and the euro.

 My view:

While Canada does considerable trade with China, this deal caught me by surprise.

Canada's major trading partner is the United States, and now they have made a deal to bypass the US dollar in a bilateral currency deal with China.

The Chinese must be rubbing their hands together with glee, as this is another major country that has signed a bilateral currency deal that enhances the status of the Yuan.

One wonders what the outcome of the 2015 IMF meeting on Special Drawing Rights will be as China completes with the US in this latest development in the currency war over the dollar?