SHANGHAI: China's yuan reversed earlier gains and ended lower against the US dollar at the domestic close on Friday, after talks between Chinese and US officials offered little hope of a near-term breakthrough in defusing escalating trade tensions.
Top officials reached a consensus on some aspects of the countries' trade row, but remained relatively far apart on other issues, according to China's Xinhua news agency on Friday.
Market watchers saw no concrete progress being made after the two-day talks and expected worries of a trade war will linger.
"It could prompt China to curb yuan appreciation," Ken Cheung, senior Asian FX strategist at Mizuho Bank in Hong Kong said.
"Chinese policymakers are paying more attention to the downside risk on the economy now as seen from the latest RRR cut (banks' reserve requirements). The central bank may not only use the monetary policy but also comprehensive stimulus to boost the economy, and yuan policy is one of them," he said, adding Beijing could use the news headlines as an excuse to weaken the yuan for now.
The Chinese currency was set for its third losing week against the resurgent dollar.
The spot market opened at 6.3465 per dollar and was settled at 6.3589 by the closing bell at onshore trading session.
If the spot yuan ends the late night trading session at its domestic close, it would have lost 0.44 percent against the dollar in the holiday-shortened week - its third straight weekly loss and longest losing streak since September 2017.
The dollar consolidated above the 92.50 line on Friday against a basket of its rivals, rounding off a third week of solid gains as widening interest rate differentials supported the greenback.
The dollar index, a gauge measures the unit's strength against six other major currencies stood at 92.569 as of 1030 GMT. It hit a 2018 high of 92.83 on Wednesday and has gained around 4 percent in the last two weeks.
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