FOREX-Yen gains but yuan, Aussie dip as U.S.-China trade war escalates

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Risk aversion drives currencies as trade war intensifies
* China's yuan slips to 4-mth low in offshore trade

By Shinichi Saoshiro
TOKYO, May 13 (Reuters) - The safe-haven yen edged higher
and the Chinese yuan and Australian dollar dipped early on
Monday after the latest escalation in the trade war between the
United States and China.
The world's two biggest economies appeared at a deadlock
over trade negotiations on Sunday as Washington demanded
promises of concrete changes to Chinese law and Beijing said it
would not swallow any "bitter fruit" that harmed its interests.
The trade conflict had escalated on Friday, with the United
States hiking tariffs on $200 billion worth of Chinese goods.
China has vowed to retaliate but has not given details.
"The conflict between the United States and China over trade
is intensifying and the yen is gaining while the Chinese yuan
and Australian dollar are retreating as a result today," said
Masafumi Yamamoto, chief forex strategist at Mizuho Securities
in Tokyo.
"The overall reaction by currencies have been limited,
however, as there are also factors that support hopes for an
eventual settlement, such as the possibility of the two
countries' presidents meeting at the G20."
U.S. President Donald Trump and his Chinese counterpart Xi
Jinping are likely to meet during a G20 summit in Japan at the
end of June and discuss trade, White House economic adviser
Larry Kudlow said on Sunday. The dollar was 0.3 percent lower at 109.650 yen JPY= , near
a three-month low of 109.470 brushed late last week.
The Chinese yuan weakened about 0.3 percent to 6.866 per
dollar in offshore trade CNH=D4 , its lowest in four months.
The Australian dollar shed 0.15 percent to $0.6990 AUD=D4 .
The currency is sensitive to shifts in risk sentiment and also
serves as a liquid proxy of trades related to China, the
country's largest trading partner.
The dollar lost 0.1 percent to 1.010 Swiss francs CHF= , a
safe haven along with the yen, after going as low as 1.009 on
Friday, its weakest in nearly a month.
The euro was little changed at $1.1234 EUR= .
The dollar index against a basket of six major currencies
inched down 0.05 percent to 97.283 .DXY .

(Editing by Kim Coghill)