SHANGHAI/HONG KONG, Oct 12 (Reuters) - China's onshore yuancurrency weakened against the dollar on Friday morning asunexpectedly strong China exports data renewed anxiety over theSino-U.S. trade war.The weakness followed a jump in late trading on Thursday,spurred by news that Washington will not accuse Beijing ofcurrency manipulation - seen as a sign of easing tensions. The People's Bank of China (PBoC) set the yuan mid-point at6.9120, the weakest fixing since March 10, 2017 prior to tradeon Friday .
Spot yuan opened at 6.8997 per dollar and waschanging hands at 6.9010 at midday, 122 pips weaker than theprevious late session close.
The yuan posted its biggest gain against the greenback inseven weeks on Thursday after reports U.S. Treasury Departmentstaff had advised Secretary Steven Mnuchin that China was notmanipulating the yuan - welcome news as the Trump administrationprepares a closely watched report on foreign currencies.But China reported on Friday an unexpected acceleration inexport growth in September and a record trade surplus with theUnited States, fanning concerns the already-heated trade spatcould get uglier.
Even though the Wall Street equity sell-off helped softenthe greenback , "it still makes sense to be longdollars," a Hong Kong-based trader said on Friday.
"The headlines will keep coming in. It is notgoing to be easy for China to make big concessions ...The tradedispute is going to take a long time to resolve."
Capital Economics wrote: "the big picture is Chinese exportshave so far held up well in the face of escalating tradetensions and cooling global growth, most likely thanks to thecompetitiveness boost provided by a weaker renminbi."But analysts warn that there's a limit for China to usecurrency depreciation to cushion the impact from trade tussles,with signs China is starting to constrict capital outflows tocontrol of pace of yuan declines. The Thomson Reuters/HKEX Global CNH index , whichtracks the offshore yuan against a basket of currencies on adaily basis, stood at 92.95, firmer than the previous day's92.82.
The global dollar index fell to 94.994 from theprevious close of 95.017.
The offshore yuan was trading at 6.9012 per dollar.Offshore one-year non-deliverable forwards contracts(NDFs) , considered the best available proxy forforward-looking market expectations of the yuan's value, tradedat 6.988, 1.09 percent away from the midpoint.One-year NDFs are settled against the midpoint, not the spotrate.The yuan market at 4:18AM GMT:
ONSHORE SPOT: Item CurrentPreviousChange PBOC midpoint6.9126.9098-0.03% Spot yuan6.9016.8888-0.18% Divergence from-0.16%
midpoint*
Spot change YTD -5.71% Spot change since 200519.93% revaluation
Key indexes:
ItemCurrent PreviousChange
Thomson 92.95 92.82 0.1 Reuters/HKEX
CNH index
Dollar index94.99495.0170.0
*Divergence of the dollar/yuan exchange rate. Negative numberindicates that spot yuan is trading stronger than the midpoint.The People's Bank of China (PBOC) allows the exchange rate torise or fall 2 percent from official midpoint rate it sets eachmorning.OFFSHORE CNH MARKET
InstrumentCurrent Difference from onshore Offshore spot yuan6.90070.00%
*
Offshore6.988 -1.09% 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 Samuel Shen and Noah Sin; editing by Eric Meijer)
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