A few months later from the beginning of the unexpected devaluation of the yuan started to show resistance. Because of this, speculators who bet on a further decline for the currency, resulting in losses.
Not paying off during expired options, which would have brought profit to their holders, if the exchange rate yuan/dollar held above the 6.6. It would be the weakest level since the launch of the devaluation in August.
The sum of these loss-making contracts is estimated at $562 million, and in the next three months will expire options by $807 million.
It is clear that this is only part of the possible losses of traders, however, the government of China, obviously, were serious opponents contrary to the expectations of speculators. To support the exchange rate and restore confidence in the currency, the government took emergency steps, such as limiting the outflow of capital, buying RMB in the market and verbal intervention.
The players down there was a difficult choice: to risk and to persist further, or to abandon their trading strategy.
Chinese authorities want to control the yuan and will do everything possible for its dynamics did not depend on anyone else. Is it worth it to go against a giant economy and a controller that can easily crush you? No.
Hilmi Ünver, expert Swiss management company Notz Stucki & Cie
The beginning of the year for the yuan was the worst for the last 20 years, but from 7 January, the currency has strengthened against the dollar by 1.6%. Measures of the authorities, thus, failed.
