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(Reuters) - Several major hedge funds are piling into bets that China's currency will decline against the dollar, according to the Wall Street Journal.
Hayman Capital Management has invested about 85 percent of its portfolio in bets against the yuan and the Hong Kong dollar, and Greenlight Capitalholds options that pay off if the yuan falls. Hedge fund managers Stanley Druckenmiller and David Tepper have also taken positions against the Chinese currency, the Journal said, citing people familiar with the matter.
The bets reflect the multitude of pressures on China's currency, including a slowing economy, unsteady financial markets and persistent capital outflows that have diminished the country's formidable foreign reserves.
At the same time, the U.S. dollar has risen steadily against other currencies as the relative strength of its economy has compelled the Federal Reserve to raise interest rates for the first time since the 2009 recession.
Reporting by Carl O'Donnell; Editing by Dan Grebler