Cooper
26-11-2004, 06:34 AM
Thought I'd start off a forum on this topic. From CNN.com....
SINGAPORE (Reuters) -- The near-term premium on the Chinese yuan in offshore markets surged to its highest in more than a year Thursday as speculation intensified that the currency might be revalued as early as next week.
The one-month yuan premium in non-deliverable forwards (NDFs) was quoted as high as 720 points, pricing in an advance of nearly one percent in the yuan within a month.
One-year NDFs were quoted at 4,500 points, pricing in nearly six percent gains in the yuan.
Traders said NDF volumes had swelled, trading was brisk and even implied volatility on the yuan had risen sharply.
"Some people are saying it could happen after Thanksgiving. Others say next week," said one trader, referring to a decision on a yuan revaluation.
There was conjecture that such a decision will be made at the annual Central Economic Work Conference to be held this month.
For more than two years, markets have speculated that China will liberalize its nine-year-old band for the yuan, amid claims from the United States and other industrialized nations that an undervalued yuan gives Chinese exporters an unfair advantage.
The yuan has traded in a band around 8.28 per dollar since late 1997.
China has said it is committed to freeing the yuan but at its own pace. Various administrative measures have been introduced in recent months to cool China's rapidly growing economy.
A recent surprise move to raise policy rates and last week's measures to let Chinese transfer more yuan into foreign currency intensified expectations that currency reform might be imminent.
Have any currency speculators (ie Arco) a view on the Yuan ATM?
Regards.
SINGAPORE (Reuters) -- The near-term premium on the Chinese yuan in offshore markets surged to its highest in more than a year Thursday as speculation intensified that the currency might be revalued as early as next week.
The one-month yuan premium in non-deliverable forwards (NDFs) was quoted as high as 720 points, pricing in an advance of nearly one percent in the yuan within a month.
One-year NDFs were quoted at 4,500 points, pricing in nearly six percent gains in the yuan.
Traders said NDF volumes had swelled, trading was brisk and even implied volatility on the yuan had risen sharply.
"Some people are saying it could happen after Thanksgiving. Others say next week," said one trader, referring to a decision on a yuan revaluation.
There was conjecture that such a decision will be made at the annual Central Economic Work Conference to be held this month.
For more than two years, markets have speculated that China will liberalize its nine-year-old band for the yuan, amid claims from the United States and other industrialized nations that an undervalued yuan gives Chinese exporters an unfair advantage.
The yuan has traded in a band around 8.28 per dollar since late 1997.
China has said it is committed to freeing the yuan but at its own pace. Various administrative measures have been introduced in recent months to cool China's rapidly growing economy.
A recent surprise move to raise policy rates and last week's measures to let Chinese transfer more yuan into foreign currency intensified expectations that currency reform might be imminent.
Have any currency speculators (ie Arco) a view on the Yuan ATM?
Regards.