The USD/CNY forex swaps are slightly higher despite increasing forward dollar sell orders as yuan funding needs grow. The one-year USD/CNY forex swaps are quoted at a premium of 1492 pips from the spot vs Tuesday's 1475 pip premium. A Shanghai-based foreign bank trader says the one-year swaps have been ranging around 1500 pips to 1600 pips premium recently and are expected to stay within that range. "Whenever the premium falls below 1500 pips, yuan demand would emerge and push the swaps up," he adds. The USD/CNY spot is at 6.2252 vs 6.2265. Offshore, one-year USD/CNY NDFs are trading at 6.3208/6.3273 from 6.3277/6.3342 late Tuesday.
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