FOREX TRADERS

[craddock]

[16:08 USD/CNY: Paulson Continues to Pressure China] San Francisco, September
13. US Treasury Sec"y Paulson reiterated comments calling on China to act on its
currency in his speech today. The comments come after his statement last night
that China should let the yuan rise more. The comments pushed 1-year NDF levels
to 7.6980/7.7010 overnight and the lowest levels since May. However, the impact
on spot was limited with the USD/CNY closing at 7.9479 on the automated price
matching system, compared to 7.9463 yesterday. Apparently, there were wide-
spread rumors overnight that China would widen the currency trading band that
forced the PBOC news department to deny any such plan was in place. Certainly,
China"s currency is still expected to be a focus at the G-7 following comments
yesterday from a Canadian official calling for a more flexible yuan.
Drawing attention as well today were further reports, based on news Monday that
China will experiment with easing more restrictions on Yuan convertibility in
the Northern China financial center of Tianjin. China has kept strict controls
in place in many regional centers despite announcing recent currency
liberalization measures. For USD/CNY, 7.9360 traded on Sept 7 remains the low
since revaluation in July 2005. [e-mail]