HSBC uses derivatives to drive development of RMB market

Forward forex index vanilla option helps guard against volatility

Candy Ho
Candy Ho, HSBC

The seemingly inexorable upward move of the renminbi against the dollar ended in February this year with a sudden drop that caught market players by surprise; the renminbi fell nearly 4% against the US currency in a matter of weeks. One month later, the People's Bank of China doubled the one-day trading band from 1% to 2% adding another layer of uncertainty to a previous one-way bet. One trend remained constant, however: the increasing internationalisation of the currency – the decision in Janua

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