Yuan’s Long-Term Hedge Costs Equalize for First Time Since 2011

An options market gauge showing the cost to hedge against declines or advances in the yuan has turned neutral for the first time in more than 14 years.

So-called one-year risk reversals for the offshore yuan-dollar currency pair have fallen below zero to the lowest since July 2011, according to data compiled by Bloomberg. The level indicates that traders are now paying about the same amount to hedge against yuan strength as they are against its weakness.