Hedge funds expect yuan value to drop by 30% against greenback - RTRS
|Reuters carried a story on Monday, reporting that major hedge funds expects yuan value to drop 30% per dollar, as China’s efforts to stem capital outflows is not likely to go unnoticed.
According to the US hedge-fund manager Kyle Bass, “China’s capital outflows are worse than they appear, which is why the government has allowed the RMB to depreciate over the last two months. We believe this pressure will continue with the prospect for higher interest rates in the US.”
The yuan slumped to more than 6.92 per US dollar in late November before suspected state-directed intervention gave the currency a lift. It was trading just under 6.90 on Friday.
Further, Wall Street bank Goldman Sachs noted last week that long USDCNY is its number two recommended trade for 2017, after bets against sterling and the euro.
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