SHANGHAI, Aug 10 (Reuters) - The yuan was largely flat on Monday, as some weakness in the dollar offset investor worries over a potential flare up in Sino-U.S. tensions before a bilateral meeting later this week. The world's two largest economies are scheduled to talk on Aug. 15 to review the trade agreement signed in January, with tensions running high after U.S. President Donald Trump signed executive orders banning WeChat and TikTok in 45 days' time and announcing sanctions on senior Chinese and Hong Kong officials. Many traders and analysts said they did not expect the bilateral meeting to yield meaningful breakthroughs to meet trade agreement targets. Instead, some believed that Beijing would react to Washington's latest actions this week. "China has only reached about 50% of its Phase 1 trade commitment until now, so the meeting will be an assessment of intent rather than a pat on the back for compliance," Stephen Innes, chief global markets strategist at AxiCorp, said in a note. "Indeed, that is a vast and colossal tail risk given the market is very 'short' dollars, long CNH." Onshore yuan opened at 6.9644 per dollar and was changing hands at 6.9671 at midday, 1 pip weaker than the previous late session close. A trader at a Chinese bank said the domestic currency market was generally in a risk aversion sentiment on Monday morning, as spot prices swung in a tight range of less than 100 pips. "Before the U.S. elections, headline risks related to China-U.S. tensions are likely to be dominating in the RMB market, pointing to limited RMB upside," said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong. But Cheung expects the recent broad dollar weakness should help stabilize the yuan at around 7 per dollar in coming months. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.9649 per dollar, 241 pips or 0.35% weaker than the previous fix of 6.9408. The global dollar index fell to 93.329 at midday from the previous close of 93.421. The offshore yuan was trading at 6.9678 per dollar as of midday. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.9649 6.9408 -0.35% Spot yuan 6.9671 6.967 0.00% Divergence from 0.03% midpoint* Spot change YTD -0.06% Spot change since 2005 18.79% revaluation Key indexes: Item Current Previous Change Thomson 91.69 91.59 0.1 Reuters/HKEX CNH index Dollar index 93.329 93.421 -0.1 *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 6.9678 -0.01% * Offshore 7.1217 -2.20% 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 Lincoln Feast.)
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