China’s Epic Short Squeeze Is Back as Yuan Rally Burns Bears
- Surge in yuan, offshore borrowing costs echoes January 2016
- Bearish option bets sink as traders cut odds on 7 per dollar
Traders Scramble for Yuan as China Chokes Outflows
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For yuan bears, it’s the worst kind of deja vu.
As China’s currency posts a record two-day rally offshore and skyrocketing interbank rates make short positions prohibitively expensive, memories of an epic squeeze last January are rushing back to bearish traders. The abrupt market reversal almost exactly a year ago marked the beginning of a nearly 5 percent rally that lasted two months.