Exchange ruler halt speculative deals cooling NDF

Suppressed by the first deficit in March, the yuan dropped slightly on April 12 by exchange spot rate together with one-year non-deliverable forward against the dollar, implying weakened expectation for yuan’s up.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

According to the Customs, the first trade deficit presented at the end of the first quarter for 7.23 billion US dollars, putting an end to ever-lasted surplus as along as 70 months since 2004. 

The trade deficit in 6 six year has weakened yuan’s appreciation at offshore market, presenting yesterday the fall of NDF for US$ from 6.6055 down 6.6140 against last Friday, which means the hope for yuan’s up rate down 3.20 percent from previous 3.34 percent.

A state-based commercial bank dealer indicated “there will be limited waves amid yuan NDF and the spot rate even today, so yuan’s tendency shall keep steady continually before the policy of revaluation opened”.

It is to be noted that, when speaking of yuan’s tendency, <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Guangdong supervision officials warn the exchange traders not to speculate the so-called exchange policy, revealed by the insiders, deputy administrator Wang Xiaoyi also calls for legal operation from the traders to help maintaining market stability.