THE yuan yesterday inched up against the U.S. dollar, which slipped globally, and some corporate clients sold the U.S. unit ahead of the latest round of U.S.-China trade talks.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing for talks scheduled to start Thursday, while a Chinese delegation led by Vice Premier Liu He will visit Washington next week, the White House said Saturday.

Traders said the talks remain a key factor affecting market sentiment, and any news suggesting progress will be positive for the yuan.

In the spot market, onshore yuan opened at 6.7200 per dollar and was changing hands at 6.7138 at midday, 42 pips firmer than the Friday late session close.

Some market participants said although the spot yuan was trading slightly higher in morning session, it is vulnerable to swinging due to uncertainty in the dollar’s movements and worries over a global economic slowdown.

The dollar eased as the spread between 3-month Treasury bills and 10-year note yields inverted for the first time since 2007. Historically, an inverted yield curve has signalled an impending recession.

“Overseas markets are trying to figure out the global economic downturn,” said a trader at a domestic bank.

“In domestic market, one of the variables could be changes to the currency policy. And everyone is nervous,” he said.

(SD-Agencies)