SHANGHAI, Aug 18 (Reuters) - The yuan hit a more than five-month high against an easing dollar on Tuesday, with investors relieved that a U.S.-China trade deal appears intact despite rising political frictions on a host of other issues. White House trade adviser Peter Navarro told media on Monday that the Phase 1 trade deal was still on track. A weekend review of the agreement was postponed to give China more time to ramp up its purchases of U.S. goods. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at a new five-month high of 6.9325 per dollar, 37 pips or 0.05% firmer than the previous fix of 6.9362. Tuesday's guidance rate was the strongest since March 9. In the spot market, onshore yuan opened at 6.9300 per dollar and rose to a high of 6.9250 at one point, the loftiest level since March 9. By midday, it was changing hands at 6.9315, 3 pips firmer than the previous late session close. "If the trade deal is implemented smoothly, the yuan will continue to take advantage of sound economic fundamentals and widened yield gap between China and the United States to rise towards 6.9 per dollar level in the mid- to long-term," analysts at China Construction Bank (Asia) said in a note. "On the contrary, if the Sino-U.S. relations take a sudden turn for the worse, the yuan could fall back to 7." The Trump administration on Monday announced it will further tighten restrictions on Huawei Technologies Co , aimed at cracking down on its access to commercially available chips. Separately, global markets were anxiously awaiting the minutes of the U.S. Federal Reserve's last policy meeting, which are due for release on Wednesday, for hints of any possible policy changes in the near term. The dollar teetered near multi-month or multi-year lows against a number of currencies on Tuesday, after a triple blow of retreating yields, soft U.S. economic data and a dip in safe-haven demand exerted broad selling pressure. The global dollar index fell to 92.664 at midday from the previous close of 92.819. The offshore yuan was trading at 6.9265 per dollar by midday. The yuan market at 0401 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.9325 6.9362 0.05% Spot yuan 6.9315 6.9318 0.00% Divergence from -0.01% midpoint* Spot change YTD 0.46% Spot change since 2005 19.40% revaluation Key indexes: Item Current Previous Change Thomson 91.94 92 -0.1 Reuters/HKEX CNH index Dollar index 92.664 92.819 -0.2 *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% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.9265 0.07% * Offshore 7.0805 -2.09% 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 Winni Zhou and Andrew Galbraith; Editing by Kim Coghill)
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