Société Générale currency analyst Olivier Korber noted that only China and Mexico's weight has increased in the U.S. dollar's trade-weighted measure since 2006, while shares fell for both the eurozone and Japan.

And based on the currency weights used in its trade-weighted dollar index by the Federal Reserve, China has even overtaken Canada to make the yuan the US's second-most traded currency just after the euro, Korber observed.

"The yuan's rise in trade-weighted currency baskets redefines the relative importance of big forex generators," said Korber, adding that China is "reshuffling its cards" by slowly introducing the yuan as a global currency.

Yuan trade on mainland Chinese trading floors is tightly controlled, with its rate strongly directed by China's People's Bank or PBOC. In an international sector through Hong Kong and other financial centers, the money frequently changes hands.

In the wake of the U.S.-China trade tussle, the currency has strengthened against the greenback, a shift that mirrored both the perceived underperformance of China's economy and what many analysts see as Beijing's attempt to partially offset the effect of tariff hikes on Chinese goods.

The yuan exchanged in August at more than 7 billion to the dollar- a point previously protected by Beijing - which somehow eased some weight on the country's trade spat with the US.

The yuan later recovered some power, switching hands briefly to the greenback at less than 7 earlier this month. It traded on Thursday at 7,0208 yuan in onshore sessions.

Korber pointed out that the "unpredictability" of the PBOC has made the yuan into an "almost exogenous variable for market outlets" by providing a daunting source of volatility.

However, the new reality must be discussed by market participants, Korber stated. It underscores why there was a rise in the implied correlation between the Chinese and American currencies, as well as the European and yuan pair, reflecting how the yuan is increasingly influencing the euro and the dollar, he said, noting that the correlation is close to the level seen at the end of 2016.

According to a Credit Agricole economist, the Chinese yuan might improve against the greenback if China and the U.S. were to conclude a so-called Phase One trade agreement.

Analysts agree that if this step one agreement, including no further tariffs, is completed, then there is scope for renminbi appreciation, said Dariusz Kowalczyk, a French bank chief economist, referring to the other term of the Chinese currency.