Arab Today, arab today spot traders benefit as china eases yuan
Last Updated : GMT 23:00:22
Arab Today, arab today
Arab Today, arab today

Spot traders benefit as China eases yuan

Arab Today, arab today

Arab Today, arab today Spot traders benefit as China eases yuan

Shanghai - Arabstoday

Chances rise for short-term gains on speculation as long-term derivatives become less certain. For players in China\'s tightly bound currency market, the authorities\' loosening of the strings this month to allow wider yuan moves has boosted both opportunities for short-term profit, as volatility rises, and long-term risks, with yuan appreciation no longer a certainty. The People\'s Bank of China (PBOC) this month made yuan trading more of a two-way street than ever before, with relatively hefty day-to-day losses as well as gains, testing how the market will value the yuan as authorities gradually nudge their currency towards a free float and global status. China\'s leaders appear to be growing confident that, with the yuan up 30 per cent against the dollar since its landmark 2005 revaluation, and with the trade surplus shrinking and actually shifting into its biggest deficit in at least a decade in February, the currency is approaching fair value. This creates a whole new ball game for traders and investors long accustomed to a yuan market that only goes one way — up — and has done so in a gradual, orderly fashion. \"There are clearly both business opportunities and risks if the yuan is trading in a wider range,\" said Wang Haoyu, economist at First Capital Securities in Shenzhen. \"The rare trade deficit in February relieved pressure on the yuan to appreciate and presented a good opportunity to test the waters for reform.\" In the domestic market, one result of the new volatility has been dollar buying by banks and corporations for short-term speculation, never seen before when the dollar mainly moved lower against the yuan. More volatility also boosts potential profits, making it worthwhile to jump in for short-term speculators, especially for astute PBOC-watchers in a market where the central bank still exerts substantial influence. Offshore, some traders say short-term forwards of three months or less are now preferred for speculative plays, while contracts above six months are used increasingly for hedging purposes, as uncertainty mounts about the long-term trend. Most traders still believe the yuan will appreciate this year, despite a decline of 0.2 per cent so far since January 1, as exports are expected to rebound somewhat, but the full-year rise is likely to be much less than last year\'s 4.7 per cent. Moreover, as the spot yuan market in the mainland gains more freedom of movement, values are coming more closely into line with the overseas Hong Kong market, traders said. The spread between the two has narrowed to less than one-tenth what it was in January and barely one-thirtieth the divergence last September. These developments feed into China\'s aim to steadily deepen and develop the yuan market, and eventually make the yuan a freely traded international currency, although comments last week by Chinese Premier Wen Jiabao maintained the government\'s vague stance on when that might happen. The yuan volatility this month has been unprecedented in the 18-year history of the domestic currency market. In the first half of March, the PBOC\'s daily midpoint, the base rate indicating government intentions on currency values, saw a 0.7 per cent drop in the yuan against the dollar, the biggest 11-session loss since the domestic market\'s launch. Over the next seven sessions up to yesterday, the fixing\'s yuan value rose 0.8 per cent, the biggest seven-session gain in more than seven months. The dollar/yuan spot rate can rise or fall 0.5 per cent on any given day against the midpoint, which the PBOC says is set while taking market activity into account. A Reuters poll this month showed that analysts and economists believe China could double the daily trading band as soon as the second quarter. From: Gulfnews

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spot traders benefit as china eases yuan Arab Today, arab today spot traders benefit as china eases yuan

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today spot traders benefit as china eases yuan Arab Today, arab today spot traders benefit as china eases yuan

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today Italy regions back 'big bang' autonomy

GMT 07:10 2017 Monday ,23 October

Italy regions back 'big bang' autonomy
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Trump: End of Daesh is in sight

GMT 20:29 2017 Monday ,23 October

Trump: End of Daesh is in sight
Arab Today, arab today Maltese demand justice for murdered

GMT 06:08 2017 Monday ,23 October

Maltese demand justice for murdered
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Lost Australia diver swam miles

GMT 19:09 2017 Monday ,23 October

Lost Australia diver swam miles
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla to build wholly-owned plant

GMT 07:55 2017 Monday ,23 October

Tesla to build wholly-owned plant
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Rogina happy for reactions to “The Flood”

GMT 09:30 2017 Friday ,20 October

Rogina happy for reactions to “The Flood”
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 06:07 2017 Sunday ,22 October

15,000 Under Fives Die

GMT 12:54 2017 Saturday ,21 October

Malaysia Airlines picks new CEO

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday