SHANGHAI, Aug 3 (Reuters) - The yuan was steady on Monday after booking its best month in nine in July, as investors kept a wary eye over tensions between Beijing and Washington and the fate of popular short-video app TikTok's U.S. operations. Sources told Reuters that U.S. President Donald Trump has agreed to give China's ByteDance 45 days to negotiate a sale of TikTok to Microsoft Corp after U.S. officials have said TikTok, under its Chinese parent, poses a national risk because of the personal data it handles. Traders said TikTok issue and the broader tensions in Sino-U.S. relations could affect the yuan's movements and market sentiment in the near term. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at one-week low of 6.998 per dollar, 132 pips or 0.19% weaker than the previous fix of 6.9848. In the spot market, the onshore yuan opened at 6.9791 per dollar and was changing hands at 6.9743 at midday, only 2 pips firmer than the previous late session close. The onshore yuan gained 1.3% to the dollar last month, marking its best month since October 2019, mainly driven by a broadly softer greenback as investors worried about a resurgence of coronavirus cases in the United States. Li Liuyang, chief foreign exchange analyst at China Merchants Bank in Shanghai, said the weaker dollar trend was likely to continue in the medium term due to uncertainties caused by the surging coronavirus cases in the United States and the upcoming presidential election. "For this week, market could expect a phone call or meeting between trade negotiators from China and United States," Li said, noting speculation about a possible review of the Phase 1 trade deal agreed in January this year. The global dollar index rose to 93.453 at midday from the previous close of 93.408. The offshore yuan was trading at 6.9777 per dollar by midday. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.998 6.9848 -0.19% Spot yuan 6.9743 6.9745 0.00% Divergence from -0.34% midpoint* Spot change YTD -0.16% Spot change since 2005 18.67% revaluation Key indexes: Item Current Previous Change Thomson 91.75 91.17 0.6 Reuters/HKEX CNH index Dollar index 93.453 93.408 0.0 *Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 2% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.9777 -0.05% * Offshore 7.1088 -1.56% non-deliverable forwards ** *Premium for offshore spot over onshore **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. . (Reporting by Winni Zhou and Andrew Galbraith Editing by Shri Navaratnam)
Our Standards: The Thomson Reuters Trust Principles.