China's yuan held familiar ranges on Monday morning, as investor caution about developments in the Sino-U.S. trade dispute and other global risks kept market volumes thin. A slew of events this week, including the Dec. 15 deadline for U.S. tariffs on Chinese goods, the UK election and major central bank decisions, could shape the investor outlook for 2020 and have the potential to jolt market confidence.
Prior to the market opening on Monday, the People's Bank of China (PBOC) set the midpoint rate at 7.0405 per dollar, 22 pips weaker than the previous fix of 7.0383. In the spot market, onshore yuan opened at 7.0343 per dollar and was changing hands at 7.0352 at midday, 2 pips weaker than the previous late session close.
The onshore spot yuan swung in a tight range of less than 70 pips in morning trade and volume shrunk to $10.306 billion by midday, compared with a typical half-day volume of about $15 billion. "The China-U.S. Phase One trade deal remains elusive. China's insistence for U.S. tariff rollbacks remains a critical red line," "U.S. President Trump has warned that, without a deal, the U.S. tariffs on Chinese goods will proceed as planned on Dec. 15." onshore and offshore yuan rates could revisit September highs around 7.20.
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