FOREX-Yuan pulls off lows, yen falls as Beijing seen curbing fresh yuan losses

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Offshore yuan rebounds from all-time low in Asia
* U.S. brands China a currency manipulator
* U.S.-China trade war enters uncharted territory
* China let onshore yuan fall to 11-year low Monday

(Adds details on stock futures, Australian and New Zealand
dollars)
By Stanley White
TOKYO, Aug 6 (Reuters) - The offshore yuan pulled back from
an all-time low on Tuesday after Beijing appeared to take steps
to prevent the currency from weakening further, following a
sharp drop that prompted the U.S. government to declare China
was manipulating its currency.
The yen erased gains versus the dollar and fell against most
major currencies, while the dollar index .DXY against major
peers remained on the backfoot after Monday's rapid escalation
in tensions pushed the U.S.-China trade war into uncharted
territory.
On Monday, China let the onshore yuan break through the key
7 per dollar level for the first time since the global financial
crisis, sending global financial markets into a tailspin, and
investors are closely watching to see how much more Beijing will
allow it to fall. China said early on Tuesday it was selling yuan-denominated
bills in Hong Kong, in a move seen as curtailing short selling
of the currency. It also set a daily mid-point for onshore trade that was
slightly firmer than markets had expected, though it was still
the weakest level since May 2008.
However, the dollar remained down against the euro, while
U.S. stock futures fell on worries the trade conflict with China
would hurt U.S. economic growth and corporate profits.
U.S. Treasury Secretary Steven Mnuchin said in a statement
on Monday the government had determined that China is
manipulating its currency and that Washington would engage with
the International Monetary Fund to eliminate unfair competition
from Beijing.
Yuan's sudden drop through the 7 mark came days after
President Donald Trump announced he would impose 10% tariffs on
$300 billion of Chinese imports, ending a month-long trade
truce. "The recovery in yuan and the move in the yen is triggered
by the fixing, which has eased some concern about competitive
currency devaluation," said Masafumi Yamamoto, chief currency
strategist at Mizuho Securities in Tokyo.
"China is not really trying to dramatically weaken its
currency. However, nothing has been resolved in the trade war."
The offshore yuan CNH=D3 initially fell to 7.1265 per
dollar, the lowest since offshore trading began in 2010, but
then erased these losses to trade unchanged at 7.1004.
The onshore yuan CNY=CFXS opened trade at 7.0699 per
dollar and was last at 7.0569, versus its last close at 7.0498.
The dollar initially fell versus the yen JPY=EBS to 105.51
yen, the lowest since a flash crash in January that roiled
currency markets, but then erased to rise 0.34% to 106.32.
The yen also weakened against major crosses after the latest
moves from Beijing.
The New Zealand dollar NZDJPY= surged 0.9% to 69.79 yen,
while the Australian dollar rose 0.7% to 72.08 yen.
The euro EUR=EBS rose 0.3% versus the dollar to $1.1238,
its strongest level since July 19.
In Asian trade S&P 500 futures ESc1 fell 0.7% due to
concern about how the trade war will impact the U.S. economy.
Elsewhere in currency markets, the Australian dollar
AUD=D3 rose 0.4% to $0.6787 before a Reserve Bank of Australia
meeting later on Tuesday.
The RBA is expected to leave its benchmark interest rate at
a record low of 1.00%, but the trade war is a source of concern
for Australia's economy because it ships a lot of raw materials
to China. The New Zealand dollar NZD=D3 jumped by 0.5% to $0.6562,
its biggest daily gain in three weeks, after New Zealand's
jobless rate fell to an 11-year low.
The Reserve Bank of New Zealand is expected to cut interest
rates to a record low of 1.25% on Wednesday, but strong
unemployment data suggests the economic is not as bad as some
had speculated. = 7.0508 Chinese yuan renminbi)