SHANGHAI, July 17 (Reuters) - China's yuan was little
changed against the U.S. dollar on Wednesday as traders awaited
policy news from a key leadership gathering in Beijing that is
expected to end on Thursday.
    Worries about slower growth in China's economy in the second
quarter were offset by a weakened dollar as traders bet on U.S.
rate cuts as early as September.

By 0334 GMT, the yuan was unchanged at 7.2688 to
the dollar after trading in a range of 7.2658 to 7.2691.
    Prior to the market opening, the People's Bank of China set
the midpoint rate, around which the yuan is allowed
to trade in a 2% band, at 7.1318 per dollar, 1,312 pips firmer
than a Reuters' estimate.
    The spot yuan opened at 7.2669 per dollar and was
last trading 26 pips lower than the previous late session close
and 1.92% weaker than the midpoint.
    The yuan has been mostly unchanged against the dollar this
month but has eased 2.3% this year. It has been under pressure
since early 2023 as a protracted property crisis, anaemic
consumption and falling yields drive capital flows out of China,
and foreign investors stay away from its struggling stock
market.
    Data on Monday showed the world's second-largest economy
grew much slower than expected in the second quarter as a
protracted property downturn and worries over jobs knocked the
wind out of a fragile recovery.
    With business and consumer sentiment near record lows, the
Communist party plenum will seek to inject confidence in the
economy. However, conflicting goals such as boosting growth
while cutting debt may mean little progress toward implementing
change.
    "The offshore renminbi (yuan) has been underperforming the
euro and the yen in the past few days. Part of it is due to
China's poor Q2 and June economic data out on Monday, and part
of it could be a manifestation of the 'Trump trade'," said Alvin
T. Tan, head of Asia FX strategy at RBC Capital Markets.
    "I expect USD/CNY (dollar yuan pair) to retest last year's
7.35 high in coming months." 
    The dollar was mixed on Wednesday after a modest but
short-lived boost following better-than-expected U.S. retail
sales data, as traders focused on the prospect of Federal
Reserve rate cuts.
    While the dollar initially got a lift on the back of the
data, it failed to sustain its gains as the report did little to
alter market bets for a Fed cut in September, which is now fully
priced in. 
    Based on Wednesday's official guidance, the yuan is allowed
to drop as far as 7.2744.
    The central bank has been gradually lowering its daily yuan
official guidance, well within market projections but with a
bias suggesting it is allowing some depreciation, traders and
analysts said. 
    The offshore yuan traded at 7.2858 yuan per dollar,
up about 0.04% in Asian trade.
    The dollar index languished near a one-month low and
last stood at 104.22. 
    
Key onshore vs offshore levels:
    * Overnight dollar/yuan swap onshore -7.65 pips vs. offshore
-7.65
    * Three-month SHIBOR 1.9 % vs. 3-month CNH HIBOR
3.3 %

LEVELS AT 0330 GMT
 INSTRUMENT   CURRENT    UP/DOWN(-)    % CHANGE    DAY'S HIGH  DAY'S 
              vs USD     VS. PREVIOUS  YR-TO-DATE              LOW
                         CLOSE %                               
 Spot yuan    7.2688     0             -2.3        7.2658      7.2691