Europe's interest in emerging Asia continues as central banks from China and Germany look for greater co-operation in financial markets. During a state visit to Europe's largest economy, Chinese President Xi Jinping oversaw his central bank collaborate on clearing and settlement for the Chinese yuan with their German counterpart. The move comes as the Chinese currency extends its global presence and usage.

The People's Bank of China (PBoC) and the Deutsche Bundesbank signed a memorandum of understanding as German and Chinese officials spoke about economics and politics in Berlin. Germany is pitching for a share of the growing volumes in offshore Chinese instruments. Under the new arrangement the central bank will allocate a clearing bank to clear and settle transactions in Frankfurt. German-Chinese trade has increased since China’s thirty-year rise to economic glory, in 2013 China was Germany’s second largest import nation after Netherlands, importing over 73 billion euros worth of goods and services.

Dr Joachim Nagel a Member of the Bundesbank's Executive Board commented about the proposed partnership in a statement, he said: "The Bundesbank supports the creation of a renminbi clearing solution in Frankfurt. The city is one of Europe's foremost financial centres and home to two central banks, making it a particularly suitable location. Renminbi clearing will strengthen the close economic and financial ties between Germany and the People's Republic of China."

Germany’s central bank joins the growing list of financial institutions offering domestic clearing in the Chinese yuan. In Asia, Hong Kong has spearheaded the process along with Taiwan and Singapore. In Europe, London, the world's largest centre for FX trading has been a gaining traction as an overseas market for yuan trading. Earlier this week the UK Treasury extended its current position and plans to commence clearing in the yuan. Closer ties with Beijing have been a key point on the current government's agenda, David Cameron visited China in early December last year.

Germany's main cash and derivatives exchange has also strengthened their ties with China in a signing ceremony. Speaking at the event, Reto Francioni, CEO of Deutsche Börse said: “The extended cooperation between Bank of China and Deutsche Börse will foster the safety and stability of capital markets and stimulate economic growth. Both nations will benefit from it. At the same time, it is an important milestone in the further implementation of our company’s strategy. We are making good progress in Asia.”

Deutsche Borse initiated talks of an eastern focused business plan during its new year reception in January, Mr. Francioni explained (during his speech): “We have established favourable conditions to make Frankfurt a European centre for financial market activities in China. This will only succeed however, if the important institutions, policymakers and the financial centre here all pull together as a team.”

Offshore clearing of the renminbi is a crucial step in the overall liberalization of the controlled currency. Under the new regime, firms will be able to pay and receive funds in renminbi, in addition corporates will benefit from banks providing credit in the currency.

Hong Kong, the premier destination for offshore clearing currently oversees $5 billion of daily trading volumes, according to a report by the Hong Kong Money Authority on RMB  Payments  Payments One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. One of the bases of mediums of exchange in the modern world, a payment constitutes the transfer of a legal currency or equivalent from one party in exchange for goods or services to another entity. The payments industry has become a fixture of modern commerce, though the players involved and means of exchange have dramatically shifted over time.In particular, a party making a payment is referred to as a payer, with the payee reflecting the individual or entity receiving the payment. Most commonly the basis of exchange involves fiat currency or legal tender, be it in the form of cash, credit or bank transfers, debit, or checks. While typically associated with cash transfers, payments can also be made in anything of perceived value, be it stock or bartering – though this is far more limited today than it has been in the past.The Largest Players in the Payments IndustryFor most individuals, the payments industry is dominated currently by card companies such as Visa or Mastercard, which facilitate the use of credit or debit expenditures. More recently, this industry has seen the rise of Peer-to-Peer (P2P) payments services, which have gained tremendous traction in Europe, the United States, and Asia, among other continents.One of the biggest parameters for payments is timing, which looms as a crucial element for execution. By this metric, consumer demand incentivizes technology that prioritizes the fastest payment execution.This can help explain the preference for debit and credit payments overtaking check or money orders, which in previous decades were much more commonly utilized. A multi-billion-dollar industry, the payments space has seen some of the most innovation and advances in recent years as companies look to push contactless technology with faster execution times. Read this Term in May 2013.

A number of Chinese banks have had a presence in Germany's financial capital for over fifteen years. These include: Agricultural Bank of China, Bank of China, Industrial & Commercial Bank and the China Construction Bank Corp. Thomson Reuters, one of the largest dealer to dealer interbank platforms in the foreign exchange market saw record trading activity in its yuan contract in January this year. In addition, Russia’s main derivatives exchange has seen positive activity in its yuan futures contract.

The Chinese yuan has become an interesting proposition for international currency traders as volumes gradually increase, in the last BIS FX Survey (2013) the Chinese yuan entered the top ten global currencies traded.

Brokers in the margin FX and CFD landscape have extended their product offering to cater to the needs of traders looking for exposure in emerging market currencies. Several firms offer CFDs in the Indian rupee, Chinese yuan and Russian ruble.

Recently, the Chinese central bank increased the daily band of the renminbi trades. The currency has limited  Volatility  Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets. Read this Term due to the tight trading range, however the yuan has been weakening against the dollar over the last 7 days as China's economic slowdown raises concerns on the impact on global growth. The UK’s benchmark index, the FTSE 100, traded in the green at the open on the last trading day of the week as mining stocks were optimistic on a possible increase in industrial sending in the world's most populous nation.