By Patricia Lui
April 28 (Bloomberg) -- Yuan forwards fell on concern the euro zone’s deepening debt crisis may derail a global economic recovery and prompt China to delay appreciation of its currency.
Standard & Poor’s Ratings Services yesterday cut Greece’s credit rating by three notches to junk, the first time a euro member has lost its investment grade since the currency’s debut. The firm also slashed Portugal’s ratings by two steps to A-. Global stock markets slumped, and the Chicago Board Options Exchange Volatility Index, popularly known as the fear gauge, jumped the most since October 2008.
“The magnitude of declines in U.S. and European stocks has substantially reduced investors’ appetite for risk,” said Dariusz Kowalczyk, chief investment strategist for SJS Markets Ltd. in Hong Kong. “Any emerging-market asset will fall under the current circumstances, and this specially applies to Chinese forwards as the likelihood of a yuan appreciation declines.”
Twelve-month non-deliverable forwards fell 0.2 percent to 6.6270 per dollar as of 8:47 a.m. in Beijing, according to data compiled by Bloomberg. It was the lowest level for the contracts since April 20 and reflects bets the currency will strengthen 3 percent from the spot rate of 6.8258. The yuan has been pegged at about 6.83 per dollar since July 2008.
--Editors: Ven Ram, Sandy Hendry
%CNY
To contact the reporters on this story: Patricia Lui at plui4@bloomberg.net
To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.
No comments:
Post a Comment