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China Yuan Up On Demand From Exporters, Yuan Appreciation Hopes

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littlekracker


* APRIL 20, 2010, 4:25 A.M. ET

China Yuan Up On Demand From Exporters, Yuan Appreciation Hopes



Vs Parity Pvs
USD/CNY Central Parity 6.8263 6.8262
USD/CNY OTC 0730 GMT 6.8255 -0.01% 6.8268
High 6.8267 +0.01%
Low 6.8253 -0.01%


SHANGHAI (Dow Jones)--China's yuan strengthened against the U.S. dollar Tuesday afternoon, as demand for the yuan from exporters emerged after midday and speculation that China could allow the yuan to strengthen further in the near term continued to linger.

On the over-the-counter market, the dollar was at CNY6.8255 around 0730 GMT, down from Monday's close of CNY6.8268. It traded between CNY6.8253 and CNY6.8267.

The central bank set the session's central parity rate slightly higher at 6.8263 from 6.8262 Monday, reflecting the dollar's overnight gains against major currencies. It also indicates the People's Bank of China is still maintaining the yaun's de facto peg against the dollar so far, traders said.

"People are waiting closely to see whether there will be any new signals from government officials on yuan policies and whether there will be any significant changes in fixing setting in the near term," said a Shanghai trader at a local bank.

Traders said the market was quiet most of the session until after midday, when demand for the yuan, likely from exporters, pushed the local currency higher.

"The volume was quite big," a Shenzhen-based trader at a local bank said.

Meanwhile, profit taking in the dollar, which rose against the yuan late-session Monday on demand from importers, also supported the local currency during the session.

"There was a wave of dollar demand from oil importers late in the session yesterday, causing a spike because of relatively poor liquidity at the end of the day," a Shanghai-based trader at a local bank said. "The market is more balanced today."

Offshore, dollar-yuan nondeliverable forwards were at 6.6220/6.6260, down slightly from 6.6290/6.6310 late Monday.

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