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The yuan closed two notches softer versus the US dollar at 8.2772 on Wednesday, but remained near the stronger end of its managed trading range.

The one-year non-deliverable dollar forward discount versus the yuan was at 4,775 points implying a rate of 7.8005 yuan per dollar in 12 months' time.

NDFs are a transaction where a forward price is agreed between a customer and a bank, but settlement on the value date is undertaken entirely in US dollars.

One-year implied yuan volatility was traded at 10.50/12.50 percent on Wednesday.

Implied volatility is a measure of how much the options market expects the price of the underlying asset to move during the life of the option. The yuan moves in a band of 8.2760 to 8.2800 enforced by the central bank.

Copyright Reuters, 2004


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