China's Steady Hand Keeps FX Traders From Hitting Panic Button
- Dollar-yuan risk reversals remain below 2015, 2016 levels
- Markets see China gradually letting the yuan weaken: Jefferies
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The yuan’s dramatic descent has currency traders on edge -- but they’re not yet panicking.
That’s the takeaway from the pair’s risk reversals, a put-call barometer of positioning and sentiment, according to Jefferies global head of FX Brad Bechtel. While dollar-yuan is trading weaker than after China’s shock devaluation of the currency in 2015, risk reversals across all maturities remain well below levels reached in the aftermath.