Yuan Volatility Wanes Offshore as Hibor Eases, Fed Holds Rates
- Overnight hibor rate has slumped to 1.46% from 23.7% on Monday
- Offshore yuan supply could tighten again if dollar gains: ANZ
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A gauge of expected price swings in the offshore yuan dropped to the lowest level in a month as a cash squeeze eased and the Federal Reserve scaled back its outlook for higher borrowing costs.
The offshore yuan’s one-month implied volatility, which is used to price options, slid 44 basis points to 3.87 percent as of 5:11 p.m. in Hong Kong, according to data compiled by Bloomberg. That’s the lowest level since Aug. 18. A measure of the greenback’s strength fell the most in two weeks on Wednesday after a divided Fed left its key rate unchanged, with officials now anticipating two increases in 2017, one less than they projected in June.