London further cemented itself as a key hub for the yuan in 2018, with a turnover in the Chinese currency increasing by 17 percent last year, according to the latest data from the Bank of England (BoE).
Published on Tuesday, the BoE's Foreign Exchange Joint Standing Committee survey showed turnover of U.S. dollar/yuan trading overtook pound sterling/euro for the first time in 2018, making the former the "seventh most traded currency pair in London."
Seventy-three billion U.S. dollars' worth of U.S. dollar/yuan trades took place every day in October 2018, compared to 66 billion U.S. dollars' worth for sterling/euro trades.
London remains the world's biggest forex trading hub, with 2.6 trillion U.S. dollars' worth of trading taking place every day by October last year, a 10 percent increase since April 2018, which was the last time the survey was conducted.
Curtis Pfeiffer, the chief business officer at Pragma Securities, told the Financial Times "given London has made a concerted effort to become a hub for yuan trading, this data indicates that its efforts are bearing fruit."
The increase comes despite declining demand for sterling amid ongoing uncertainty surrounding Brexit. The BoE survey found that the volume of the pound against U.S. dollar trades decreased eight percent from April, with pound versus euro volumes fell seven percent over the same period.
London's aim of becoming the leading Western hub for clearing the Chinese currency has grown rapidly in the past five years. 2014 saw China Construction Bank become the first official London-based yuan clearing bank, while last year London was second only to Hong Kong in terms of offshore yuan payments.
A report published in December by the City of London and the People's Bank of China (PBOC) Representative Office For Europe showed the UK capital accounted for 38.64 percent of global yuan FX trading volume.