Yuan Proxies becoming popular

China bears are shorting yuan proxies, as risks of central bank intervention loom large with the currency edging toward its decade-low again.

“I can’t help but be bearish on the Aussie, which is the most liquid proxy to express China risks,” said Stephen Innes, head of trading for the Asia Pacific at Oanda Corp. in Singapore. If needed, “the PBOC can be merciless and jack up interest rates to outrageous levels. While the proxies will follow the yuan stronger in that case, they will not do so with the same vigour and allow a more comfortable exit if you decide to cut and run.”

Bloomberg

 

Bloomberg

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes