CHINA’S renewed efforts to curb declines in its currency are doing little to dissuade yuan bears.

    Traders have turned increasingly negative amid tighter liquidity, sending bets for further losses soaring.

    The gap between forward contracts wagering on the offshore yuan a year from now versus its current level is heading for a record monthly jump, just as the extra cost for options to sell the currency against the U.S. dollar hit a six-month high relative to prices for contracts to buy.

    The currency is facing a triple whammy of accelerating capital outflows, faster U.S. interest rate increases and concerns over domestic financial markets as liquidity tightens.

    Strategists say its weakening, set to be the biggest this year in more than two decades, may accelerate as the government restores the annual quota for citizens to convert yuan holdings into foreign exchange.

    U.S. President-elect Donald Trump has also threatened to slap 45 percent tariffs on China’s imports to the United States.

    Bears are adding positions because expectations for the yuan to depreciate are getting stronger and stronger,” said Larry Hu, head of China economics at Macquarie Securities Ltd. “The pressures will likely continue and could get even worse, considering capital outflows and concerns on the reset of individuals’ conversion quota.” (SD-Agencies)