Currency Traders Are Betting Against Trump, Too
The president’s diminishing poll numbers have been a good thing for China's yuan.
A born winner.
Photographer: Erin Scott/BloombergWith pollsters predicting that Donald Trump will soon be out of the picture, global investors can finally breathe a big sigh of relief. Foreign policy could become more predictable, so they can start buying Chinese government bonds, which actually pay interest. They can also invest in the mainland, where a successful Covid-19 containment strategy has allowed businesses to resume. Money managers won’t have to be on the edge all the time.
This is certainly what traders are betting on. In recent weeks, the yuan has appreciated strongly against the U.S. dollar — so much so that over the weekend, the People’s Bank of China removed one of the signature tools it uses to stabilize a weaker currency. Shorting the yuan just became cheaper.