It may seem like a strange time for hedge fund manager Kyle Bass to exit his short bet against the offshore yuan– just as the trade looks to have a chance of becoming seriously profitable.
Almost four years after the long-time China bear made the wager, the currency is under increasing pressure amid a worsening trade conflict. If nothing else, fears of a global economic slowdown are giving traders a reason to flee to the haven of the dollar. That points to further weakness in emerging-market currencies, the yuan included.
It’s unclear when exactly Bass closed the position, which he held as recently as March. The Hayman Capital Manager founder no longer has a vested interest in China’s currency, he told Bloomberg Television in the U.S. in an interview Tuesday. Had Bass closed the trade in April, he wouldn’t have profited much. In July 2015, the offshore yuan was trading at around 6.2 per dollar; it was at 6.7 in April, a depreciation of about 7.5 percent.
A Good Trade?
The yuan hasn’t weakened beyond 7 to the dollar since Bass made his short bet
Beting on capital markets has always been that, until Chinese made it clear, their determination and full character as a discipline culture. On resume, dont mess with them.
01;59 a.m. May 15.