Economics
Offshore Yuan Forwards Show Bears' Confidence Has Been Shaken
- Contracts' discount to spot rate is near a one-month low
- Onshore yuan jumped Monday by most since peg scrapped in 2005
Yuan Rally Unlikely to Last: Panmure Gordon
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Global investors are winding in bets on a yuan devaluation as a dollar rally reverses at the same time as China strengthens support for its currency.
Twelve-month forwards for the offshore yuan rallied 2 percent so far this month in Hong Kong, outperforming the exchange rate’s 1.2 percent gain, data compiled by Bloomberg show. The contracts are about 3.5 percent weaker than the spot rate, a gap that reached a one-month low of 3.3 percent on Thursday after widening to a record 5 percent in January. All of the Group of 10 currencies have gained ground on the dollar in February as prospects for a U.S. interest-rate increase dimmed.