FOREX-Yuan sinks past 7/dlr to over decade low as trade tensions heat up

* Yuan down over 1% on concerns about trade war impact
* Aussie near January low, yen hits 7-month high
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano
TOKYO, Aug 5 (Reuters) - China's yuan tumbled more than 1%
on Monday to 11-year lows on mounting fears over a sharp
escalation in the U.S.-China trade war, sparking a sell-off in
other currencies in the region.
The broadening fallout of the trade dispute saw investors
rushing into perceived safe-haven assets, with the Japanese yen
rising to a seven-month peak.
The yuan broke through 7 per dollar, which some market
players have regarded as a major support level, falling to as
low as 7.1097 per dollar CNH= in offshore trade and 7.0424 to
the dollar CNY=CFXS onshore.
"This could well be the biggest moment for the yuan this
year. The impact of U.S.-China trade is turning out to be very
big," said Masashi Hashimoto, senior currency analyst at MUFG
Bank.
"Looking at the mid-point, the People's Bank of China is
trying to stem the yuan's fall," he said. "The PBOC doesn't look
like it is trying to use a weaker yuan to counter U.S. trade
pressure. The yuan's fall seems to be stemming from panicky
selling."
The yuan last stood down 1.4% at 7.0793 offshore, and 1.1%
at 7.0166 onshore. It was the first time the yuan traded above 7
per dollar since May 2008.
The sharp fall came after Beijing vowed on Friday to fight
back against U.S. President Donald Trump's abrupt decision to
slap 10% tariffs on the remaining $300 billion in Chinese
imports, a move that ended a month-long trade truce.
The plunging yuan knocked off many currencies in the region.
The Australian dollar slipped 0.5% to $0.6770 AUD=D4 ,
hitting a seven-month low of $0.6748. The currency wasn't far
off its Jan. 3 flash-crash low of $0.6715.
The Korean won fell 1%, hitting a three-year low of 1,218.3
per dollar KRW=KFCT while the new Taiwan dollar fell more than
0.5% to a two-month low of 31.61 to dollar TWD=TP .
The U.S. dollar was on the back foot against traditional
safe-haven currencies.
The dollar fell to as low as 105.80 yen JPY=EBS , its
weakest since its January flash-crash, and last stood at 106.07
yen, down 0.5%.
The euro also rose 0.15% to $1.1122 EUR=EBS , extending its
recovery from a two-year low of $1.1027 touched on Thursday.
On Friday, the closely-watched U.S. employment data showed
nonfarm payrolls increased by 164,000 jobs in July, fewer than
the prior month, and wages increased modestly. The data cemented expectations that the Federal Reserve will
cut interest rates again in September after it delivered its
first rate reduction in more than a decade last month.

(Editing by Shri Navaratnam and Jacqueline Wong)