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 6.6048. 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 expectations. The global dollar index fell to 92.505 at midday, when the offshore yuan was trading at 6.5665 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5762 6.6048 0.43% Spot yuan 6.5678 6.5827 0.23% Divergence from -0.13% midpoint* Spot change YTD 6.02% Spot change since 2005 26.02% revaluation Key indexes: Item Current Previous Change Thomson 95.88 95.85 0.0 Reuters/HKEX 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 morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.5665 0.02% * Offshore 6.7372 -2.39% 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 Sam Holmes)
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