Post by Fletchsmile on Jun 21, 2015 14:30:51 GMT 7
Chinese continuing their efforts to become a significant currency..
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Yuan’s Peg-Like Stability Makes China Hottest Asian Carry Trade
China’s central bank has kept the yuan around 6.2 to the dollar for the past three months, helping make it Asia’s hottest carry trade.
The currency hasn’t deviated more than 0.4 percent either side of that level since March 19, giving investors the confidence to borrow in lower-yielding currencies and to take leveraged bets in a market where the benchmark sovereign yield is 3.57 percent. The yuan has been the most attractive destination for such trades amid an emerging-market slump, according to the Sharpe Ratio, which measures returns adjusted for price swings. Offshore Chinese bonds are rallying.
BlackRock Inc. has been adding yuan debt and says exchange-rate stability in the next 18 months will make it an attractive carry trade, according to Neeraj Seth, Singapore-based head of Asian credit.
China is keeping the yuan steady to persuade the International Monetary Fund to grant it reserve-currency status and discourage capital outflows.
contd.
www.bloomberg.com/news/articles/2015-06-18/yuan-s-peg-like-stability-makes-china-hottest-asian-carry-trade-ib2ditwx
=====================================================
Yuan’s Peg-Like Stability Makes China Hottest Asian Carry Trade
China’s central bank has kept the yuan around 6.2 to the dollar for the past three months, helping make it Asia’s hottest carry trade.
The currency hasn’t deviated more than 0.4 percent either side of that level since March 19, giving investors the confidence to borrow in lower-yielding currencies and to take leveraged bets in a market where the benchmark sovereign yield is 3.57 percent. The yuan has been the most attractive destination for such trades amid an emerging-market slump, according to the Sharpe Ratio, which measures returns adjusted for price swings. Offshore Chinese bonds are rallying.
BlackRock Inc. has been adding yuan debt and says exchange-rate stability in the next 18 months will make it an attractive carry trade, according to Neeraj Seth, Singapore-based head of Asian credit.
China is keeping the yuan steady to persuade the International Monetary Fund to grant it reserve-currency status and discourage capital outflows.
contd.
www.bloomberg.com/news/articles/2015-06-18/yuan-s-peg-like-stability-makes-china-hottest-asian-carry-trade-ib2ditwx
