Chinese yuan notches softer

09 Nov, 2004

The yuan ended a notch softer at 8.2765 per US dollar on Monday, still near the stronger end of its managed trading range. The one-year non-deliverable dollar forward discount versus the yuan was at 3,730 points implying a rate of 7.905 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 8.00/9.00 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, a strong $1 billion on Friday, was not immediately available.
The yuan softened to 7.8455 against 100 Japanese yen from 7.8005 on Friday, and weakened against the euro to 10.7237 from 10.6609.
China's central bank said on Monday it would issue 12 billion yuan in short term bills on Tuesday, a gentle move to help the market digest last month's surprise interest rate hike.

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