Yuan weakens on stalled trade review as PMI buoys dollar

    SHANGHAI, Aug 24 (Reuters) - China's yuan eased against the
dollar on Monday morning, as the U.S. currency rebounded on
better-than-expected manufacturing activity data.
    While U.S. President Donald Trump raised the possibility of
decoupling the U.S. economy from China in an interview over the
weekend and there was no breakthrough on a U.S.-China trade
review, yuan market sentiment appeared unruffled.
    The yuan changed hands at 6.9201 in the spot market at
midday, 11 pips lower than Friday's late session close.
    Prior to market open, the People's Bank of China set the
midpoint rate at 6.9194 per dollar, weaker than the
previous fix of 6.9107. 
    Sentiment for the greenback has improved somewhat due to
supportive data on business activity and home sales, reinforcing
prospects for economic recovery in the world's largest economy.
    The U.S. flash manufacturing PMI for August exceeded
expectations, while a similar survey for the eurozone was worse
than expected, according to Ken Cheung, chief Asian FX
strategist at Mizuho Bank.
    Investors are now keenly awaiting Federal Reserve Chair
Jerome Powell's address at this week's Jackson Hole symposium,
where he will give a review of the Fed's monetary policy
    Mizuho's Cheung said yuan investors remained calm even as
China and the United States failed to hold a review of the
delayed Phase 1 deal over the weekend. 
    "The consequence of further delay in the trade talks is not
devastating as the China-U.S. trade deal is supposed to remain
intact as long as China keeps buying U.S. agricultural goods,"
he wrote.    
    The Thomson Reuters/HKEX Global CNH index, which
tracks the offshore yuan against a basket of currencies on a
daily basis, stood at 92.47, firmer than the previous day's
    The global dollar index rose to 93.234 from the
previous close of 93.198. 
    The offshore yuan was trading 0.05 percent away
from the onshore spot at 6.9165 per dollar.     
    One-year NDFs are settled against the midpoint, not the spot

    The yuan market at 4:19AM GMT: 
 Item               Current  Previous  Change
 PBOC midpoint      6.9194   6.9107    -0.13%
 Spot yuan          6.9203   6.919     -0.02%
 Divergence from    0.01%              
 Spot change YTD                       0.62%
 Spot change since 2005                19.60%
    Key indexes:
 Item            Current     Previous  Change
 Thomson         92.47       92.39     0.1
 CNH index                             
 Dollar index    93.234      93.198    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

 Instrument            Current   Difference
                                 from onshore
 Offshore spot yuan    6.9165    0.05%
 Offshore              7.0696    -2.12%
*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 Samuel Shen and Andrew Galbraith; Editing by
Jacqueline Wong)