Chinaâs Booming Economy Is Fueling Alternative Yuan Trades
Apr 23 2021, 2:52 PM
April 23 2021, 5:32 AM
April 23 2021, 2:52 PM
(Bloomberg) -- Optimism over Chinaâs economy is fueling some alternative bets in the foreign-exchange market.
(Bloomberg) -- Optimism over Chinaâs economy is fueling some alternative bets in the foreign-exchange market.
Buy the yuan against the Singapore dollar and yen on expectations that Chinaâs growth would outperform the region, analysts say. The upbeat view has boosted the Bloomberg CFETS RMB Index, which tracks the Chinese currencyâs movement against 24 trading-partners, to its highest in three weeks.
While betting on the yuan against the dollar -- as China recovered from the pandemic quicker -- yielded about 7% in 2020, both currencies are more or less moving in lockstep this year as the U.S. economy starts to rebound. The alternative strategies are also a reflection of how Wall Street is increasingly positioning the Chinese currency as a global play, with banks seeking more market-making opportunities.