CORRECTED-FOREX-Offshore yuan slides towards record low after Trump tariff threat

(Corrects paragraph 1 to say eight months, not 2-1/2 years)
* China's yuan plunges after surprise tariff threat
* Yen at 16-month high vs dollar
* Euro unchanged vs dollar before U.S. jobs report
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, Aug 2 (Reuters) - China's offshore yuan fell to its
lowest in eight months on Friday and was close to a record low
after U.S. President Donald Trump's threat to impose new tariffs
on Chinese imports.
The surprise threat, raising the prospect of all imports
into the United States from China being hit with tariffs, also
sent investors scrambling for the safe-haven yen, lifting it to
a 16-month high against the dollar.
Trump said that a 10% tariff would be imposed on $300
billion worth of Chinese goods on Sept. 1 after U.S. negotiators
reported no progress during trade negotiations in Shanghai, with
the U.S. president saying China had failed to live up to
promises made in previous talks Traders say the offshore yuan is likely to continue its
decent towards the record low and key psychological level of 7
against the dollar if the trade dispute intensifies further.
The yuan was last down 0.2% at 6.9693 against the dollar
CNH=EBS after falling to 6.98, its weakest since January 2019
but close to the lowest in two-and-a-half years.
The Japanese yen was up 0.5% at 106.82 against the dollar
JPY=EBS . It had earlier jumped to 106.76, its strongest since
April 2018.
The Swiss franc, another currency widely viewed as a
safe-haven, reached a two-year high of 1.0940 EURCHF=EBS
against the euro in mid-morning London trading.
The dollar did not benefit from the scramble for safety. Its
index was last down 0.1% at 98.242 .DXY , falling away from
26-month highs hit on Thursday before news of the tariff threat.
"I'm looking for the yuan to continue to move towards all
time highs, but not yet seeing it through yet," said Neil Jones,
head of European hedge fund sales at Mizuho.
Jones said he has seen more yen demand coming through,
describing it as "a convenient hedge" against increased global
risks sparked by U.S. protectionism.
Sterling was hovering around the 30-month low it reached on
Thursday, with the British currency last trading unchanged at
$1.2126 GBP=D3 and at 91.50 pence against the euro. EURGBP=D3
Most market participants remain wary of sterling, concerned
that the chances of a disorderly Brexit grew after Boris Johnson
took over as prime minister last month and after Britain's
pro-European Union Liberal Democrats won a parliamentary seat
from the governing Conservative party.
That defeat reduces Johnson's working majority in parliament
to only one as he prepares for an expected showdown with
lawmakers over his plan to take Britain out of the European
Union on Oct. 31 without an exit agreement if necessary.
The euro was slightly lower at $1.1097, not far from the
26-month low hit the previous day EUR=EBS .
Non-farm payrolls are due in the United States later in the
day. Economists forecast a decrease in the number of jobs added
to the economy, to 164,000 in July from 224,000 in June.
Responses to the jobs report are "skewed toward a bigger
move to a weak report, given it would reinforce the increased
global risk concerns", said Derek Halpenny, currency strategist
at MUFG, after the escalation in the U.S.-China trade war.