Yuan Traders Most Bearish in Almost Four Months as Costs Surge
- Bonds extend drop as 10-year yield rises to seven-week high
- PBOC gauges demand for 28-day reverse-repurchase agreements
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Traders are the most bearish on the yuan in almost four months as rising odds of a U.S. interest-rate increase boost the dollar and the cost of borrowing the Chinese currency in Hong Kong jumps.
Twelve-month non-deliverable forward contracts traded at a 2.87 percent discount to the spot rate, compared with Friday’s 2.9 percent that was the biggest gap since May 18, data compiled by Bloomberg show. The offshore yuan erased the day’s losses amid intervention speculation. The three-month Hong Kong Interbank Offered Rate climbed 95 basis points, the most since February, to 4.21 percent, according to Treasury Markets Association data.