Stronger export numbers, or decreases in imports, help strengthen a domestic currency. Higher exports means increased demand for yuan-denominated goods, whereas lower imports translates to lower Chinese demand for foreign-currency-denominated goods.
Currency traders can also take a look at the Market Vectors Chinese Renminbi ETN (NYSEArca: CNY), an exchange traded note that follows price movements between the yuan and USD. This note is open to credit risk and uses rolling, three-month currency futures contracts to provide exposure to the exchange rate of the Chinese yuan to the U.S. dollar. CNY is down 2.8% year-to-date.
Additionally, the CurrencyShares Chinese Renminbi Trust (NYSEArca: FXCH) maintains a deposit account denominated in Chinese renminbi, and interest earned will be used to pay expenses and any left over will be distributed to shareholders. FXCH is down 2.2% year-to-date.
WisdomTree Dreyfus Chinese Yuan Fund
For more information on the yuan currency, visit our Chinese yuan category.
Max Chen contributed to this article.