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More Chinese companies are trading currency derivatives to hedge yuan risk as the currency's swings grow. The yuan slumped 6.5 percent against the dollar in 2016 and has surged 5.3 percent so far in 2017.
Hedging markets remain immature, with restrictive central bank rules and limited speculator participation.
Rising hedging activity reflects larger currency exposure for Chinese importers, which can alter their purchasing timing. The direct price effect on feed commodities is minor.
scmp.comReutersOct 10, 2017After 169 past neutral macro events, Chinese Yuan (CNY per USD) moved a median +0.0% over 5 sessions (50% higher; middle half -0.3% to +0.2%), and -0.0% 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.
