Chinese yuan notches weaker

17 Aug, 2004

The yuan ended one notch weaker at 8.2769 per US dollar on Monday, near the stronger end of its managed trading range.
The one-year non-deliverable dollar forward discount versus the yuan was at 1,650 points implying a rate of 8.113 yuan per dollar in 12 months' time.
NDFs are a transaction where a forward price is agreed between a customer and a bank, but settlement on the value date is undertaken entirely in US dollars.
One-year implied yuan volatility was traded at 5.10/6.10 percent on Monday.
Implied volatility is a measure of how much the options market expects the price of the underlying asset to move during the life of the option.
The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.
Turnover rose to $840 million from $720 million on Friday.
The yuan softened to 7.4695 against 100 yen from Friday's 7.3966, and weakened against the euro to 10.2301 from 10.1239.
China's central bank plans to sell a relatively small 8 billion yuan ($966.6 million) in bills on the open market on Tuesday, the same as last week, after recent large sales siphoned off cash from the market.

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