China Politely Moves Away from Dollar: Strategist

China's sovereign wealth fund has taken about 1 percent in drinks group Diageo, in a move which an analyst said is a sign the country is diversifying away from the US dollar.

"Diageo is pleased that one of the largest Chinese investment funds has taken a shareholding of approximately 1 percent in the company," a company spokesman told CNBC in a statement.

"We do no comment on individual shareholdings but we of course view each investment as a sign of confidence in Diageo ," the spokesman added.

The move, only the last in a series of buying of stakes in various companies around the globe by China Investment Corp, shows that the Chinese are shifting out of holding dollars "without upsetting anybody," Peter Toogood, head of investment at Old Broad Street Research, told CNBC.

Better Late than Never

With central banks printing money, currencies don't look like a safe bet and with deficits soaring, government bonds are not the safe haven they used to be, analysts have said. Stock markets have surged since their lows in March and voices predicting a continuation of the rally have become louder.

"What a great way of doing it (diversifying), to buy the thing they are trying to reflate," Toogood added.

But China will continue to buy US dollar assets, because "nothing looks structurally better" than the greenback at this moment, he said.

- Watch the interview above to hear Peter Toogood's view on interest rates.