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Yuan Shorts Gather Pace on Lockdown Threat, Property-Sector Risk

  • Currency may fall back to 6.80 per dollar: Standard Chartered
  • Risks of yuan drop have risen over tactical horizons: Goldman
Updated on

China’s yuan is under pressure to depreciate as rising Covid cases add to concern over renewed lockdowns, while expectations of aggressive interest-rate hikes by the Federal Reserve boost outflows.

Option traders have increased bearish wagers on the currency as indicated by one-month dollar-yuan risk reversals, which have nearly tripled since the start of July. The cost of shorting the yuan -- as measured by offshore yuan tomorrow-next forward points -- remains near the lowest since 2020.