Yuan ends flat versus dlr after stable mid-point
Published: 24 Feb 2010 02:11:08 PST
SHANGHAI, Feb 24 - The yuan was little changed against the dollar on Wednesday both in spot and benchmark offshore one-year non-deliverable forwards (NDFs) markets, as dealers said the Chinese central bank's almost unchanged mid-point kept the exchange rate stable for now.
The People's Bank of China fixed the yuan's daily mid-point, or its reference rate, almost unchanged at 6.8271 per dollar from Tuesday's 6.8270.
Spot yuan finished at 6.8270 per dollar on Wednesday, little changed from Tuesday's close of 6.8267.
"The mid-point at only one pip lower says it all. The central bank has no intention of allowing the yuan to appreciate for now," said a dealer at an Asian bank in Shanghai. "Today's client demand has decreased, so trade has flattened out gradually."
But the dealer said China's stable yuan policy was likely to be altered around the second quarter after the annual session of the National People's Congress, the largely ceremonial parliament, which begins on March 5.
Ben Simpfendorfer, an economist with Royal Bank of Scotland, said in his monthly report that he was still looking for appreciation to resume from the second quarter, targeting 6.500 by end-2010, or modestly more than what is priced in by one-year non-deliverable forwards.
"I cannot rule out the possibility of a small revaluation. But gradualism is likely to remain the guiding rule," he said.
Glenn Maguire, Societe Generale's chief Asia economist, told Reuters in a telephone interview that China was likely to revalue the yuan by between 5 and 10 percent in April or May, opting for a surprise one-time move to fend off speculators.
"What we are saying is that the currency is going to be moved in a one-off revaluation of between 5 and 10 percent and then Beijing will be able to make a credible commitment that exchange rate policy will remain unchanged for an extended period of time," he said.
Offshore benchmark dollar/yuan one-year NDFs were bid at 6.6610 late on Wednesday, little changed from Tuesday's close of 6.6660.
Twelve-month yuan appreciation implied by NDFs stood at 2.49 percent measured from the Chinese central bank's daily mid-point, from 2.42 percent implied at Tuesday's close.
Source: Reuters
Published: 24 Feb 2010 02:11:08 PST
SHANGHAI, Feb 24 - The yuan was little changed against the dollar on Wednesday both in spot and benchmark offshore one-year non-deliverable forwards (NDFs) markets, as dealers said the Chinese central bank's almost unchanged mid-point kept the exchange rate stable for now.
The People's Bank of China fixed the yuan's daily mid-point, or its reference rate, almost unchanged at 6.8271 per dollar from Tuesday's 6.8270.
Spot yuan finished at 6.8270 per dollar on Wednesday, little changed from Tuesday's close of 6.8267.
"The mid-point at only one pip lower says it all. The central bank has no intention of allowing the yuan to appreciate for now," said a dealer at an Asian bank in Shanghai. "Today's client demand has decreased, so trade has flattened out gradually."
But the dealer said China's stable yuan policy was likely to be altered around the second quarter after the annual session of the National People's Congress, the largely ceremonial parliament, which begins on March 5.
Ben Simpfendorfer, an economist with Royal Bank of Scotland, said in his monthly report that he was still looking for appreciation to resume from the second quarter, targeting 6.500 by end-2010, or modestly more than what is priced in by one-year non-deliverable forwards.
"I cannot rule out the possibility of a small revaluation. But gradualism is likely to remain the guiding rule," he said.
Glenn Maguire, Societe Generale's chief Asia economist, told Reuters in a telephone interview that China was likely to revalue the yuan by between 5 and 10 percent in April or May, opting for a surprise one-time move to fend off speculators.
"What we are saying is that the currency is going to be moved in a one-off revaluation of between 5 and 10 percent and then Beijing will be able to make a credible commitment that exchange rate policy will remain unchanged for an extended period of time," he said.
Offshore benchmark dollar/yuan one-year NDFs were bid at 6.6610 late on Wednesday, little changed from Tuesday's close of 6.6660.
Twelve-month yuan appreciation implied by NDFs stood at 2.49 percent measured from the Chinese central bank's daily mid-point, from 2.42 percent implied at Tuesday's close.
Source: Reuters