Yuan Traders Double Down on Bets Against the Currency

The offshore unit fell as much as 0.7% to weaken past the 7.2 per dollar level, wiping out gains from last week’s national day holidays.

(Bloomberg) — Bearish bets on the yuan are gaining momentum after the Biden administration curbed China’s access to U.S. semiconductor technology and reports endorsing Beijing’s “zero-Covid” policy dashed hopes that restrictions would be lifted soon.

Option traders are doubling down on wagers against the offshore yuan as indicated by the one-month risk reversal, which hit the highest level since May 10. Onshore yuan implied volatility for the same period rose to the highest on record as demand for protection against yuan weakness grew. The offshore unit fell as much as 0.7% to weaken past the 7.2 per dollar level, wiping out gains from last week’s national day holidays.