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FT.com / Home UK - China urged to ease its rules
China urged to ease its rules
>By Steve Johnson
>Published: April 23 2005 03:00 | Last updated: April 23 2005 03:00
>>
The yen and forward contracts based on the non-tradeable Chinese renminbi both jumped sharply yesterday amid mounting speculation that Beijing may be ready to ease its decade-long dollar peg.
China has been under increasing pressure over its currency since last weekend's meeting of the G7 group of leading nations.
The discount on one-year non-deliverable renminbi-dollar forwards widened 550 points yesterday and 950 points during the week to 4,600, the widest level since early January. The market is thus implying an exchange rate of Rmb7.818 to the dollar in 12 months' time, compared to the current Rmb8.278 rate. Shorter-term contracts moved more sharply still, with the one-month forward widening 81 per cent in a week.
The yen rallied sharply yesterday, rising 1.1 per cent to a one-month high of Y105.79 to the dollar, 0.8 per cent to Y138.49 versus the euro and 0.5 per cent to Y202.83 against sterling. Many in the market believe that a renminbi revaluation will usher in a broad wave of Asian currency strength.
The dollar endured a poor week, falling 1.3 per cent to $1.3084 against the euro, having hit a one-month low of $1.3119, and 1.2 per cent to $1.9160 against sterling.
The greenback was buffeted by jitters over a possible slowdown in global growth.
Find this article at:
http://news.ft.com/cms/s/767b78dc-b393-11d9-ad2b-00000e2511c8,ft_acl=,s01=1.html
China urged to ease its rules
>By Steve Johnson
>Published: April 23 2005 03:00 | Last updated: April 23 2005 03:00
>>
The yen and forward contracts based on the non-tradeable Chinese renminbi both jumped sharply yesterday amid mounting speculation that Beijing may be ready to ease its decade-long dollar peg.
China has been under increasing pressure over its currency since last weekend's meeting of the G7 group of leading nations.
The discount on one-year non-deliverable renminbi-dollar forwards widened 550 points yesterday and 950 points during the week to 4,600, the widest level since early January. The market is thus implying an exchange rate of Rmb7.818 to the dollar in 12 months' time, compared to the current Rmb8.278 rate. Shorter-term contracts moved more sharply still, with the one-month forward widening 81 per cent in a week.
The yen rallied sharply yesterday, rising 1.1 per cent to a one-month high of Y105.79 to the dollar, 0.8 per cent to Y138.49 versus the euro and 0.5 per cent to Y202.83 against sterling. Many in the market believe that a renminbi revaluation will usher in a broad wave of Asian currency strength.
The dollar endured a poor week, falling 1.3 per cent to $1.3084 against the euro, having hit a one-month low of $1.3119, and 1.2 per cent to $1.9160 against sterling.
The greenback was buffeted by jitters over a possible slowdown in global growth.
Find this article at:
http://news.ft.com/cms/s/767b78dc-b393-11d9-ad2b-00000e2511c8,ft_acl=,s01=1.html
posted by Eastlaw at Monday, April 25, 2005
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