China’s Unfazed Yuan Traders Bet Tariffs Won’t Be Hiked
- Demand for bearish positions in the options market remains low
- Volatility gauges on the currency are far from August highs
This article is for subscribers only.
China yuan traders are undaunted by Sunday’s looming start of fresh U.S. tariffs even as investors elsewhere are piling into protection.
As President Donald Trump’s Dec. 15 deadline for more duties on Chinese imports draws closer, one-week risk reversals -- a measure of demand for bearish yuan bets relative to bullish calls in the options market -- have been at their lowest since July. And while volatility gauges for the currency have jumped in the past week, they remain well below levels reached in August, when the yuan weakened through 7 per dollar for the first time since 2008 amid trade worries.