Yuan at 29-month high as U.S. coronavirus surge weighs on dollar

    SHANGHAI, Nov 17 (Reuters) - The yuan hovered at a near
29-month high on Tuesday, helped by broad dollar weakness as
rising numbers of coronavirus infections prompted many U.S.
states to impose tougher restrictions.
    Global investors are worried wider economic disruption from
the coronavirus is unlikely to be offset by the rollout of a
COVID vaccine.
    A Reuters poll also showed that the near-term economic
recovery was slowing more than previously thought, with the
coronavirus seen as a bigger risk to the U.S. economy than a
prolonged dispute over the presidential election result.

    "The yuan was largely reacting to a weaker dollar, and (the
local unit) could test 6.5 per dollar level if such greenback
weakness persists," said a trader at a Chinese bank.
    Prior to market opening, the People's Bank of China (PBOC)
set the midpoint rate at a 29-month high of 6.5762
per dollar, 286 pips, or 0.43%, firmer than the previous fix of
    In the spot market, the onshore yuan opened at
6.5720 per dollar and was changing hands at 6.5678 at midday,
not far from a near 29-month high of 6.5630 hit on Nov. 9.
    "The RMB appreciation following the signing of the Regional
Comprehensive Economic Partnership (RCEP) was not disrupted by
the vaccine development," said Ken Cheung, chief Asian FX
strategist at Mizuho Bank in Hong Kong. 
    "We argued that the vaccine breakthrough will undermine
China's exceptional growth momentum and in turn keep the RMB
rally in check."
    Cheung has maintained his forecast of modest yuan
appreciation due to lingering monetary divergence between China
and the United States, along with a weaker dollar.
    Moderna Inc said on Monday its experimental vaccine
was 94.5% effective in preventing COVID-19 based on interim data
from a late-stage clinical trial, becoming the second U.S.
company in a week to report results that far exceeded
    The global dollar index fell to 92.505 at midday,
when the offshore yuan was trading at 6.5665 per
    The yuan market at 0400 GMT: 
 Item               Current  Previous  Change
 PBOC midpoint      6.5762   6.6048    0.43%
 Spot yuan          6.5678   6.5827    0.23%
 Divergence from    -0.13%             
 Spot change YTD                       6.02%
 Spot change since 2005                26.02%
    Key indexes:
 Item            Current     Previous  Change
 Thomson         95.88       95.85     0.0
 CNH index                             
 Dollar index    92.505      92.506    0.0
*Divergence of the dollar/yuan exchange rate. A 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    6.5665    0.02%
 Offshore              6.7372    -2.39%
*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 Winni Zhou and Andrew Galbraith; Editing by Sam