FOREX-Offshore yuan falls to record low, yen firm on intensifying trade frictions

* Offshore yuan briefly hits record low
* Aussie near Jan low, yen at 7-month high
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano
TOKYO, Aug 5 (Reuters) - The offshore Chinese yuan fell to
its weakest level on record on Monday while the Australian
dollar flirted with this year's lows on concerns over a sharp
escalation in the Sino-U.S. trade war.
The broadening fallout of the trade dispute saw many
investors seeking cover in perceived safe-haven assets,
including the yen and gold. The Japanese currency rose to a
seven-month peak as U.S. bond yields plunged, with the 10-year
yield at near 3-year lows, also pressured by slowing U.S. jobs
growth.
The offshore yuan briefly fell to as low as 6.9875 per
dollar on EBS CNH= , its weakest since the start of offshore
trading, but quickly bounced back to 6.9793 CNH=EBS to be flat
on the day.
China on Friday vowed 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. "China will likely take a decent size of stimulus to counter
the impact of U.S. tariff, so I would not expect serious impact
on the Chinese economy," said Yukio Ishizuki, senior strategist
at Daiwa Securities.
"The risk-off mood will stay for now but I expect markets to
gradually start consolidation," he said.
The Australian dollar slipped 0.14% to $0.6791 AUD=D4 ,
having hit seven-month low of $0.67625 on Friday. The currency
wasn't far off its Jan. 3 flash-crash low of $0.6715.
The kiwi fell 0.21% to $0.6521 NZD=D4 , having touched
1-1/2-month lows of $0.6506 of Friday, pulled down by rising
expectations that the Reserve Bank of New Zealand will cut
interest rates on Wednesday. The U.S. dollar was on the back foot against traditional
safe-haven currencies.
The yen extended its advance to 106.31 yen to the dollar
JPY=EBS , down 0.29% from late U.S. levels while the Swiss
franc CHF= gained 0.2% to 0.9799 per dollar.
The euro also rose 0.11% to $1.1119 EUR=EBS , extending its
recovery from 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
deliver another interest rate cut in September after it
delivered its first rate reduction in more than a decade last
month.