* Adds traders and analysts' comments, updates prices SHANGHAI, Oct 13 (Reuters) - China's yuan extended its recent decline on Tuesday, led lower by weaker central bank guidance, although upbeat trade data helped contain the losses. Prior to the market open, the People's Bank of China set the midpoint rate at 6.7296 per dollar, weaker than the previous fix of 6.7126 and market projections. The spot market opened at 6.7580 per dollar and was changing hands at 6.7533 at midday, 73 pips weaker than the previous late session close. The yuan retreated from a 17-month high on Monday after the central bank cut foreign exchange forward reserve requirements, with the offshore yuan posting its steepest daily drop since March. Traders said the market on Tuesday continued to digest the central bank's policy change over the weekend. "A sharp depreciation is not the policy intention of the authorities who just do not want too much one-way appreciation in the yuan," said a Shanghai-based trader at a foreign bank. "The yuan could next trade at a range of 6.7-6.8 per dollar." Analysts said the central bank's latest measures didn't really change the long-term outlook for the yuan. "It was a little reminder to investors that it's not a one-way bet. I wouldn't think that changes the fundamental investment proposition in China in a significant way," said Tai Hui, Asia chief market strategist at J.P. Morgan Asset Management. "Between now and the elections, the market may stay cautious and the dollar may stabilise and rebound a little bit. That, by default, is going to push the yuan a little weaker," he said. Losses in the Chinese currency narrowed after the country posted strong trade data. China's imports grew at their fastest pace this year in September, while exports extended their strong gains as more trading partners lifted coronavirus restrictions in a further boost to the world's second-biggest economy. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 94.23, weaker than the previous day's 94.68. The global dollar index rose to 93.186 from the previous close of 93.041. The offshore yuan slipped to a low of 6.7650 per dollar before trading at 6.7513 by midday. Offshore one-year non-deliverable forwards contracts (NDFs) , considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.9221, 2.78% away from the midpoint. One-year NDFs are settled against the midpoint, not the spot rate. The yuan market at 4:03AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.7296 6.7126 -0.25% Spot yuan 6.7533 6.746 -0.11% Divergence from 0.35% midpoint* Spot change YTD 3.11% Spot change since 2005 22.55% revaluation Key indexes: Item Current Previous Change Thomson 94.23 94.68 -0.5 Reuters/HKEX CNH index Dollar index 93.186 93.041 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 6.7533 0.00% * Offshore 6.9221 -2.78% 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 Luoyan Liu, Jindong Zhang and Tom Westbrook; Editing by Sam Holmes)
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