- The demand for CNY put options hits 7-week high amid escalating trading tensions.
- China wants to impose $7 billion a year in sanctions on the US.
The USD/CNY one-month 25 delta risk reversals (CNY1MRR) rose to 0.55 today - the highest level since July 24, signaling the demand or the implied volatility for the yuan put options is at the highest level in seven weeks.
The data indicates that investors are expecting a drop in CNY amid rising US-China trade tensions.
China told the World Trade Organization (WTO) yesterday that it wants to impose sanction worth $7 billion on the US in retaliation to Washington's non-compliance with a ruling on the dispute related to US dumping duties.
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