Chinese Yuan Faces Highest Short Positions in 18 Months; Offshore Yuan Advances 0.1% and Fixed at 7.3315

As of January 10, 2025, short positions on the Chinese yuan have reached their highest level in 18 months, indicating increased bearish sentiment among investors. In response, China is stepping up efforts to defend the renminbi against Wall Street bets. Market expectations suggest that Chinese authorities may delay anticipated monetary easing measures to support the struggling yuan. The offshore yuan has advanced by 0.1% following the People's Bank of China's (PBOC) decision to halt bond purchasing. Additionally, the yuan was fixed at 7.3315, according to recent surveys. Experts advise caution, suggesting that the market should not over-interpret the potential scope of easing under a “modestly loose” monetary policy.