for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

Yuan hits over 5-month high as U.S. assures trade deal on track

    SHANGHAI, Aug 18 (Reuters) - The yuan hit a more than
five-month high against an easing dollar on Tuesday, with
investors relieved that a U.S.-China trade deal appears intact
despite rising political frictions on a host of other issues.
    White House trade adviser Peter Navarro told media on Monday
that the Phase 1 trade deal was still on track. A weekend review
of the agreement was postponed to give China more time to ramp
up its purchases of U.S. goods.
    Prior to the market opening, the People's Bank of China
(PBOC) set the midpoint rate at a new five-month high
of 6.9325 per dollar, 37 pips or 0.05% firmer than the previous
fix of 6.9362. Tuesday's guidance rate was the strongest since
March 9.
    In the spot market, onshore yuan opened at 6.9300
per dollar and rose to a high of 6.9250 at one point, the
loftiest level since March 9. By midday, it was changing hands
at 6.9315, 3 pips firmer than the previous late session close.
    "If the trade deal is implemented smoothly, the yuan will
continue to take advantage of sound economic fundamentals and
widened yield gap between China and the United States to rise
towards 6.9 per dollar level in the mid- to long-term," analysts
at China Construction Bank (Asia) said in a note.
    "On the contrary, if the Sino-U.S. relations take a sudden
turn for the worse, the yuan could fall back to 7."
    The Trump administration on Monday announced it will further
tighten restrictions on Huawei Technologies Co         , aimed
at cracking down on its access to commercially available
chips.
    Separately, global markets were anxiously awaiting the
minutes of the U.S. Federal Reserve's last policy meeting, which
are due for release on Wednesday, for hints of any possible
policy changes in the near term.
    The dollar teetered near multi-month or multi-year lows
against a number of currencies on Tuesday, after a triple blow
of retreating yields, soft U.S. economic data and a dip in
safe-haven demand exerted broad selling pressure.
    The global dollar index fell to 92.664 at midday from
the previous close of 92.819. 
    The offshore yuan was trading at 6.9265 per dollar
by midday. 
    
    The yuan market at 0401 GMT: 
    
    ONSHORE SPOT:
 Item               Current  Previous  Change
 PBOC midpoint      6.9325   6.9362    0.05%
                                       
 Spot yuan          6.9315   6.9318    0.00%
                                       
 Divergence from    -0.01%             
 midpoint*                             
 Spot change YTD                       0.46%
 Spot change since 2005                19.40%
 revaluation                           
 
    Key indexes:
     
 Item            Current     Previous  Change
                                       
 Thomson         91.94       92        -0.1
 Reuters/HKEX                          
 CNH index                             
 Dollar index    92.664      92.819    -0.2
 
    
    
*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    6.9265    0.07%
        *                        
 Offshore              7.0805    -2.09%
 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 Kim
Coghill)
  
for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up