AGL 38.15 Decreased By ▼ -1.43 (-3.61%)
AIRLINK 125.07 Decreased By ▼ -6.15 (-4.69%)
BOP 6.85 Increased By ▲ 0.04 (0.59%)
CNERGY 4.45 Decreased By ▼ -0.26 (-5.52%)
DCL 7.91 Decreased By ▼ -0.53 (-6.28%)
DFML 37.34 Decreased By ▼ -4.13 (-9.96%)
DGKC 77.77 Decreased By ▼ -4.32 (-5.26%)
FCCL 30.58 Decreased By ▼ -2.52 (-7.61%)
FFBL 68.86 Decreased By ▼ -4.01 (-5.5%)
FFL 11.86 Decreased By ▼ -0.40 (-3.26%)
HUBC 104.50 Decreased By ▼ -6.24 (-5.63%)
HUMNL 13.49 Decreased By ▼ -1.02 (-7.03%)
KEL 4.65 Decreased By ▼ -0.54 (-10.4%)
KOSM 7.17 Decreased By ▼ -0.44 (-5.78%)
MLCF 36.44 Decreased By ▼ -2.46 (-6.32%)
NBP 65.92 Increased By ▲ 1.91 (2.98%)
OGDC 179.53 Decreased By ▼ -13.29 (-6.89%)
PAEL 24.43 Decreased By ▼ -1.25 (-4.87%)
PIBTL 7.15 Decreased By ▼ -0.19 (-2.59%)
PPL 143.70 Decreased By ▼ -10.37 (-6.73%)
PRL 24.32 Decreased By ▼ -1.51 (-5.85%)
PTC 16.40 Decreased By ▼ -1.41 (-7.92%)
SEARL 78.57 Decreased By ▼ -3.73 (-4.53%)
TELE 7.22 Decreased By ▼ -0.54 (-6.96%)
TOMCL 31.97 Decreased By ▼ -1.49 (-4.45%)
TPLP 8.13 Decreased By ▼ -0.36 (-4.24%)
TREET 16.13 Decreased By ▼ -0.49 (-2.95%)
TRG 54.66 Decreased By ▼ -2.74 (-4.77%)
UNITY 27.50 Decreased By ▼ -0.01 (-0.04%)
WTL 1.29 Decreased By ▼ -0.08 (-5.84%)
BR100 10,089 Decreased By -415.2 (-3.95%)
BR30 29,509 Decreased By -1717.6 (-5.5%)
KSE100 94,574 Decreased By -3505.6 (-3.57%)
KSE30 29,445 Decreased By -1113.9 (-3.65%)

The yuan fell against the dollar on Monday, pressured by the dollar's strength globally, but dealers said the Chinese currency was still poised for a round of faster appreciation due to China's own economic conditions.
The yuan closed at 7.9098 per dollar, down from 7.9015 at the close on Friday, after the central bank set the yuan's mid-point at a weaker 7.9148 on Monday morning, compared with its previous mid-point of 7.9116.
"Both the yuan's trading and mid-point reflected the dollar's strength on global markets," said a dealer at a European bank. "But the market believes the yuan will still resume its gains soon, helped by China's own economic demand."
One-year onshore yuan/dollar swaps were quoted at 2,050/80 pips at Monday's close, suggesting the yuan will be up 2.66/2.70 percent in a year's time against its mid-point on Monday, according to the China Foreign Exchange Trade System. One-year offshore non-deliverable forwards quoted the yuan at 7.6423/7.6523 to the dollar, forecasting a yuan rise of 3.43 to 3.57 percent.
The yuan saw volatile trade last week, jumping on Friday to recover all the losses it suffered earlier in the week, caused by North Korea saying on Monday last week it had conducted a nuclear test.
Dealers said Friday's gain indicated the People's Bank of China would not make use of the North Korean nuclear crisis as an excuse to slow yuan appreciation. Domestically, official figures published last week showed the economy slowed in September as the trade surplus fell month on month and growth in foreign exchange reverses decelerated, prompting some economists to forecast less cooling pressure.
"Barring significant surprises in the current trends, new major macro-tightening policy measures (eg, administrative measures and interest rate hikes) are unlikely," said economist Qing Wang at Bank of America.
He also saw lingering market talk that the central bank would widen the yuan's trading band as a less likely move in coming weeks. Dealers said Beijing's efforts to cool a racing economy had started to pay off, but the trade surplus had remained high and forex reserves still grew at a high rate, keeping pressure on the yuan.
They also insisted it was still a likely choice in the near future for the central bank to widen the yuan's trading range to make it easier for the yuan to appreciate at a faster pace.
"The market sees no relaxation of official efforts to use currency as a weapon to help curb economic growth," said a dealer at a second European bank. "The yuan is likely to continue a faster pace of appreciation that started in late September." Dealers said the yuan could test resistance at 7.9885 this week. Alternatively, it should find support at 7.9200.
In late September and before a week-long holiday in early October, the yuan had repeatedly hit its highest levels since Beijing revalued it by 2.1 percent and depegged it from the dollar in July 2005. The yuan's peak since it was floated is 7.8954, reached on September 28.
Globally, the dollar held near a 10-month peak against the yen on Monday after upbeat US data last week on retail sales and consumer sentiment further squashed expectations for the Federal Reserve to cut interest rates early next year.

Copyright Reuters, 2006

Comments

Comments are closed.