The Chinese renminbi (yuan) might look like a direct winner from potential uncertainty surrounding a Donald Trump presidency, but analysts warn the country's trade surplus and lack of government transparency could offset the currency's popularity as a global currency reserve.
The renminbi gained international acceptance from the International Monetary Fund last year, but it has failed to gain popularity, especially against the heavily traded U.S. dollar which is still considered the true global reserve currency. However, some analysts argue that Trump's protectionist policies and the uncertainty surrounding what path he will take for the largest economy in the world could boost the Chinese currency as a reserve.
"No longer is the U.S. dollar the only haven of safety. There is an alternative – renminbi," Daryl Guppy, CEO of Guppytraders financial market training platform, told CNBC on Friday.
A strong reserve currency is essentially seen as safe and stable and is held in large quantities by governments and institutions. It also increases the demand for a country's sovereign debt if its currency is widely traded and used. But the fact that investors are unsure of what President-elect Donald Trump will do could make other reserve currencies more appealing.
"It is possible that Trump could boost renminbi as a reserve currency as the relative safety of the U.S. dollar comes under question due to the uncertainty surrounding President Trump," Alex Dryden, global market strategist at JP Morgan Asset Management, told CNBC via email on Friday.
"Some of Trump's rhetoric surrounding negotiating the U.S. debt burden, for example, could damage the U.S. dollar as a reserve currency," he added.
However, even if the Republican victory does boosts the search for other reserve currencies, analysts are not certain that the Chinese renminbi would be the number one option.