Photo: Reuters/Jason Lee
Photo: Reuters/Jason Lee

As the yuan stabilizes against the US dollar near the 6.5 mark, overseas hedge funds were pondering their next move, reported the 21st Century Business Herald on Wednesday.

The funds, which were keen on the yuan’s appreciation, are deliberating their next move as they await further action from China’s central bank, the report said, citing an unnamed Hong Kong-based analyst.

The People’s Bank of China had removed banks’ forward reserve ratio effective on Monday, essentially enabling more forward trading of the yuan and making it easier for traders to buy the US dollar.

The move was meant to slow the appreciation of the yuan, the report added, and the yuan slid against the dollar in response.

But a fund manager interviewed by the Business Herald also said that the hedge funds are prepared to bet “both ways,” as they are worried the decline of the US dollar will ignite another fresh bout of enthusiasm for the yuan, leading to an increase of the currency in the future, the report said.

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