Traders Ease Back on Short Yuan Bets to Gauge U.S.-China Dispute
- Buildup of new options betting for yuan weakness has slowed
- Chinese central bank has taken steps to slow depreciation
Photographer: Tomohiro Ohsumi/Bloomberg
This article is for subscribers only.
Traders aren’t adding bearish options on the yuan as quickly as before, amid expectations China may take more steps to arrest the currency’s decline.
The notional value of new options betting the yuan will weaken past 7 per dollar dropped to the lowest in two months last week, according to data from Depository Trust & Clearing Corp. Bets are still coming at a faster pace than the few months before June though, when the currency started to slide as the trade dispute with the U.S. brewed. That’s left the value of outstanding contracts at $130 billion, around the highest in seven months.