Worst Yuan Drop Since 2016 Catches Options Traders Off Guard
- Demand to hedge against further losses spikes most in a year
- Currency weakens Monday after trade talks with U.S. turn sour
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Traders rushed to protect against further losses in the yuan after the currency suddenly sank the most in more than three years.
A gauge measuring demand to buy bearish contracts on the offshore yuan surged the most since early 2018 on Monday. The move came after U.S. President Donald Trump threatened to levy new tariffs on the country’s goods. China’s foreign ministry said officials were still planning to travel to the U.S. for the next round of talks but was unable to confirm when amid signs that a delay is being considered.