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The yuan posted a record two-day rally offshore, and interbank rates spiked, making short positions expensive. Traders recalled a similar squeeze the previous January.
Sharp yuan swings driven by funding squeezes add volatility to China-linked currency exposure, but the move is largely financial and has limited direct effect on feed supply or demand.
bloomberg.comBloomberg NewsJan 5, 2017After 362 past bearish macro events, Chinese Yuan (CNY per USD) moved a median -0.1% over 5 sessions (42% higher; middle half -0.4% to +0.1%), and -0.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
A record two-day offshore rally and a short squeeze with spiking interbank rates made bearish yuan positions costly, driving the yuan sharply higher on Jan 5.
