August 26, 2019 / 7:38 AM / 22 days ago

Yuan recovers as Trump raises hopes for trade war de-escalation

U.S. and Chinese flags are seen in front of a U.S. dollar banknote featuring American founding father Benjamin Franklin and a China's yuan banknote featuring late Chinese chairman Mao Zedong in this illustration picture taken May 20, 2019. REUTERS/Jason Lee/Illustration

SHANGHAI (Reuters) - China's onshore and offshore yuan CNY=CFXS CNH=D3 both trimmed sharp declines against the dollar on Monday afternoon as comments by U.S. President Donald Trump raised hopes for a de-escalation in the U.S.-China trade war.

Trump said China had contacted U.S. trade officials overnight to say they wanted to return to the negotiating table. And he hailed Chinese President Xi Jinping as a great leader and said he welcomed his desire for a deal and for calm.

Markets took his comments as a positive sign for chances for de-escalation after both sides announced additional tariffs on each other’s goods over the weekend.

Onshore spot yuan bounced to 7.1395 per dollar before trading at 7.1421 as of 0721 GMT. Its offshore counterpart rose to 7.1497 before trading at 7.1545 as of 0721 GMT.

Earlier in the session, Chinese Vice Premier Liu He said that China is willing to resolve its trade dispute with the United States through “calm” negotiations and resolutely opposes the escalation of the conflict.

Reporting by Winni Zhou and John Ruwitch; Editing by Simon Cameron-Moore

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