Yuan Surges in Hong Kong as Traders See PBOC Squeezing Bears
- Offshore funding cost surges to the highest since January
- Currency is Asia’s best performer since Moody’s downgrade
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The offshore yuan jumped the most in four months as funding costs surged amid speculation policy makers were supporting the currency in the wake of a surprise sovereign rating downgrade.
The exchange rate rose as much as 0.8 percent to 6.7677 per dollar, its highest level since Nov. 4, before trading at 6.7731 at 5:37 p.m. in Hong Kong. The currency has rallied 1.6 percent, the most in Asia, since Moody’s Investors Service cut its rating on China’s debt a week ago. A short squeeze is hurting yuan bears, while the central bank has confounded analysts with stronger fixings.