Expectations on the depreciation of.....>

CHINA PRESS: Expectations on the depreciation of the yuan have cooled

significantly following the announcement that the PBOC would issue central bank

bills in Hong Kong next week, according to a report in the 21st Century Business

Herald. The Herald quoted an unnamed foreign exchange trader, who also said that

speculative capital was quietly exiting China, and these speculators would find

it difficult to push the yuan higher into the 7.3 to 7.4 range against the

dollar because their access to leveraged finance was limited. The report said

that China's economic fundamentals supported the yuan, and there was no great

basis for a large devaluation. This would limit the amount of capital which

would follow the short selling by speculators.