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The yuan ended a notch firmer at 8.2764 per US dollar on Friday, near the stronger end of its managed trading range. The one-year non-deliverable dollar forward discount versus the yuan was at 2,920 points, implying a rate of 7.986 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 5.60/6.75 percent.

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.

Turnover, a moderate $1.18 billion on Thursday, was not immediately available. The yuan ended firmer at 7.8460 against 100 Japanese yen from 7.8553 on the previous day, but softer against the euro at 10.8147 from 10.7908.

Copyright Reuters, 2005


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