"There was so much news this morning with mixed signals," said a trader at a Chinese bank, suggesting the headlines could potentially point to different outcomes for the trade talks and triggered swings in the Chinese currency. Spot yuan opened at 7.1209 per dollar and climbed to a high of 7.1 at one point, the strongest since Sept. 20.As of midday, the onshore spot yuan was changing hands at 7.1142, 173 pips firmer than the previous late session close.A second trader at a Chinese bank said the yuan was unlikely to breach the key 7.1 per dollar level before anything official emerges from the bilateral trade discussions.Several traders said the market had been "very bearish" in past weeks, which caused news headlines on any progress in trade talks to lead to spikes in the yuan. FX strategists at DBS, however, said prospects for a trade deal remained dim. "The US has previously stressed that it wants a comprehensive trade deal covering a range of issues including IP protection and market access, which remain key points of contention," they said in a note on Thursday.The global dollar index fell to 98.994 at midday from the previous close of 99.118. The offshore yuan was trading at 7.1156 per dollar as of midday.

Source: Economic Times October 10, 2019 07:30 UTC