A new landmark in China's foreign-exchange reform was set to be reached Tuesday with the start of yuan trading against the UK pound, the Wall Street Journal reported. However, economists said yuan-sterling trading was likely to be thin as many transactions continue to be carried out indirectly through the US dollar. �It's just one of the steps to develop a proper onshore forex market,� said Qu Hongbin, an economist at HSBC. �A properly functioning forex market is one of the very important preconditions for more flexibility in the currency.� The pound will join the US dollar, yen, Hong Kong dollar and euro as one of the yuan-tradable currencies, the first addition to this group since early 2002. The daily trading range of the pound against the yuan will be 3% up or down from the central parity set each morning. US dollar-yuan trading is limited to a 0.3% daily band.
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