As the Chinese yuan and Aussie dollar formally commences direct trading today...a latest research report from ANZ Bank shows that the RMB is gradually taking the place of the Japanese yen as the leading currency in Asia.

China's central bank has signed more than 2 trillion RMB worth of currency swap agreements with many countries such as South Korea, Malaysia and Brazil. The report says the RMB is becoming more popular in the international market, as the US dollar is falling in proportion as a percent of the world's foreign exchange reserves.

China is trying to promote the RMB as an alternative to the US dollar's role as a global reserve currency. Deutsche Bank optimistically predicts that in the next few years, China's currency will become a major trade settlement currency along with the US dollar and the euro. But most analysts believe it will take at least a decade for the RMB to develop into a major reserve currency.