Offshore Yuan Erases Loss After News Currency Pact Being Weighed

(Bloomberg) -- The offshore yuan reversed declines after a report the U.S. is considering a currency pact as part of an early deal with China that could also see a planned tariff increase next week suspended.

The currency rose 0.1% to 7.1324 per dollar at 9:20 a.m. in Hong Kong. Contracts on the {{28930|FTSE Ch China A50 Index dropped 0.2%. The currency accord -- which the U.S. said had been agreed to earlier this year before trade talks broke down -- would be part of what the White House considers to be a first-phase agreement with Beijing, according to people familiar with the discussions.

The currency earlier weakened amid conflicting reports over progress of the talks.

“Market braces for more headlines -– which can be confusing -– in the next two days,” said Frances Cheung, head of Asia macro strategy at Westpac Banking Corp. “Investors may want to keep their position light.”