Chinese yuan notches weaker

30 Oct, 2004

The yuan ended two notches weaker at 8.2766 per US dollar on Friday, still near the stronger end of its managed trading range.
The one-year non-deliverable dollar forward discount versus the yuan was at 2,770 points implying a rate of 8.001 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 6.85/7.40 percent on Friday.
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 dipped to a heavy $1.35 billion from Thursday's $1.4 billion. The yuan weakened to 7.8190 against 100 Japanese yen from 7.7916 on Thursday, and softened against the euro to 10.5582 from 10.5365.
China's central bank drained 20 billion yuan ($2.4 billion) from the banking system in Thursday's open market operations by selling bills, down from last week's 40 billion yuan.

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