Wires

Yuan slips to 2-week low on uncertain progress over trade talks

SHANGHAI, Nov 19 (Reuters) - China's yuan hit a two-week low against the dollar on Tuesday, later paring losses, as sentiment grew cautious over signs that a rollback in tariffs remained a sticking point in Sino-U.S. trade talks. A CNBC report saying the mood in Beijing was pessimistic about the prospects of sealing an agreement dented sentiment. Chinese officials were troubled by President Donald Trump's comment that there was no agreement on phasing out tariffs, a government source told CNBC. But news of the U.S. government granting China's Huawei a license extension helped check the losses. The Trump administration on Monday issued a new 90-day extension allowing U.S. companies to continue doing business

with Huawei Technologies Co Ltd as U.S. regulators

continue crafting rules on telecommunications firms that pose a threat to national security. "The opening lower in early morning trade was mainly due to overnight news, but the yuan stabilized soon later," a Beijing-based Chinese trade said. The People's Bank of China set the midpoint rate at 7.003 per dollar prior to market open, a touch firmer than the previous fix of 7.0037. The spot market opened at 7.0288 per dollar and hit a low of 7.0295 before changing hands at 7.0267 at midday, 12 pips weaker than the previous late session close. "Recently the RMB was in the holding pattern above 7 handle amid mixed headlines on the China-U.S. trade talks, while investors appear to be losing their patience on striking the phase one deal, with the deadline on U.S. tariff hike on China in mid-December hanging over the talks," Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, said in report. Highlighting the trade war's impact on China's corporate world, a private survey showed on Tuesday that Chinese private firms are shunning the United States in their overseas expansion, and generally prefer a home listing to a U.S. initial public offering (IPO). The global dollar index rose to 97.799 from the previous close of 97.794. The offshore yuan was trading 0.02% weaker than the onshore spot at 7.0282 per dollar.

The yuan market at 0408 GMT:

ONSHORE SPOT:

Item Current Previous ChangePBOC midpoint 7.003 7.0037 0.01%Spot yuan 7.0267 7.0255 -0.02%Divergence from 0.34%

midpoint*

Spot change YTD -2.19%Spot change since 2005 17.79%

revaluation

Key indexes:

Item Current Previous ChangeThomson 92.03 92.19 -0.2

Reuters/HKEX CNH index

Dollar index 97.799 97.794 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 percent from official midpoint rate it sets each morning.

OFFSHORE CNH MARKET

Instrument Current Difference

from onshore

Offshore spot yuan 7.0282 -0.02%*Offshore 7.0925 -1.26%

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, Han Xiao and John Ruwitch Editing by Jacqueline Wong)