FOREX-Offshore yuan pulls off all-time lows after tentative moves from Beijing to curb falls

* China fixes offshore yuan rate below 7 and firmer than
expected
* Yen retrieves gains as appetite for risky assets returns
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, 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.
China said on Tuesday it was selling yuan-denominated bills
in Hong Kong, in a move seen as curtailing short selling of the
currency. On top of that, the People's Bank of China fixed the daily
reference rate for the onshore Chinese yuan at 6.9683, firmer
than the expected 6.9871, and below the key 7 rate through which
it broke on Monday.
These moves have led analysts to think that Chinese
authorities may not be ready yet to let the yuan weaken much
further.
"The recovery in yuan...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.
The offshore yuan CNH=EBS was last up by 0.4% at 7.0677
against the dollar after plunging to 7.14 Monday night, the
lowest since offshore trading began in 2010.
The onshore yuan CNY=CFXS opened trade at 7.0699 per
dollar, versus its last close at 7.0498.
If the Chinese central bank fixes the rate at or above 7,
this will likely be an "indication they are ready for the
remnibi weakening phase," said Stephen Gallo, forex strategist
at BMO Capital Markets.
The small rebound in the Chinese remnibi has shifted
investors' focus away from safe-haven currencies, pushing the
Japanese yen and Swiss franc lower.
The yen was last down by 0.6% at 106.56, pulling back from a
16-month high of 105.52 it reached overnight excluding the
January flash crash. The franc was 0.2% weaker, bouncing off a
25-month high it reached on Monday.
On Monday, China let its currency break through a key
support level to an 11-year low in a sign that Beijing might be
willing to tolerate more currency weakness as Washington
threatens to impose more tariffs.
And on Tuesday, China's official Communist Party newspaper
said that the United States was "deliberately destroying
international order", a day after Washington branded Beijing a
currency manipulator in a rapidly escalating trade dispute.
The escalation in the US-China trade war began last week
when President Donald Trump unexpectedly said he would impose
10% tariffs on $300 billion of Chinese imports from Sept. 1.,
essentially imposing a levy on all Chinese goods coming into the
United States. Since then, the offshore yuan lost 3.4% of its
value against the greenback.
Elsewhere, the euro EUR=EBS was flat at $1.1208 after
jumping to an 18-day high against the dollar overnight. The
index which tracks the dollar against a basket of six major
currencies .DXY was also flat at 97.57.
The pound was up 0.3% at $1.2176 GBP=D3 , not far from the
31-month low it reached last week. Against the euro, sterling
hit a new 23-month low on Tuesday of 92.49 EURGBP=D3 , but was
last up by 0.2% at 92.04 pence.