* Yuan sinks again as exports fall more than expected
* Dollar/yen retreats from 2-1/2 month high
* U.S. 10-year bond yield dips from 4-month peak
* Dollar index eases back after hitting 7-month high
* World currency performance 2016 tmsnrt.rs/2egbfVh
(Updates prices, adds more quotes)
By Patrick Graham
LONDON, Oct 13 A poor batch of Chinese trade
numbers halted the dollar's broader rally on Thursday and sent
the offshore version of the country's yuan currency to within
sight of lows hit in a dramatic sell-off in January.
The euro fell briefly below $1.10 for the first time since
July, but it quickly recovered to trade higher on the day and
the dollar fell almost half a percent against the yen and 0.2
percent against a basket of currencies.
In China's tightly controlled onshore market, the yuan was
fixed at another six-year low of 6.7296 yuan per dollar.
Offshore it traded 0.2 percent weaker at 6.7364.
China halted January's run on the currency by selling tens
of billions of its dollar reserves and pumping up offshore
interest rates on the yuan to squeeze out speculators.
But concerns over the real state of the world's
second-biggest economy and banks and companies' ability to
finance huge debts run up over the past decade continue to argue
for a sharp devaluation of the currency.
China's exports fell 5.6 percent in yuan terms in September
from a year earlier and 10 percent in dollars.
"(This data) is not good for the renminbi but it will also
weigh on U.S. treasury yields," said Stephen Gallo, European
head of FX strategy at the Bank of Montreal in London.
"Given sluggish USD rates and the fact that the odds of a
December interest rate hike are unlikely to climb much above
their current levels for the time being, there are probably
better levels to be buying dollars at in the very short-term."
The dollar dropped to as low as 103.555 yen at one
point, down 1 percent from the day's high of 104.635 yen, which
was the greenback's strongest level since late July.
The dollar last stood at 103.94 yen, down 0.2 percent from
late U.S. levels on Wednesday.
The next round of central bank policy meetings are at the
centre of market discussions.
Reuters reported late on Wednesday that the European Central
Bank may discuss technical changes to its asset-buying scheme
next week but a decision could be deferred until December when
the bank will also decide whether to extend the scheme beyond
That pushed Bund yields lower, pushing the euro to an
11-week low of $1.0985 in morning trade in London.
September meeting minutes supported growing market
expectations the U.S. Federal Reserve will raise interest rates
in December. But analysts say U.S. bond yields and the dollar
may be reaching the limits of the recent shift until the U.S.
presidential election is out of the way.
"The minutes are consistent with a December hike in our
view, which is already nearly 70 percent priced in," analysts
from Credit Agricole said in a note to clients.
Against a basket of six major currencies, the dollar last
stood at 97.994, having pulled back from a seven-month
high of 98.122 set earlier on Thursday.
(Editing by Alison Williams and Susan Thomas)