SHANGHAI: China’s yuan firmed against the dollar on Tuesday, as investors looked to monetary signals from major central bank meetings this week against the backdrop of the Middle East war and a delay to US President Donald Trump’s planned China visit. The spot yuan opened at 6.8880 per dollar and was trading at 6.8834 as of 0220 GMT, 74 pips firmer than the previous late session close. Market reaction to Trump’s plan to postpone by about a month a high-profile early-April trip to China because of the Iran war has been limited. The dollar index dipped back below 100 after touching a 10-month high last week, supported recently by safe-haven flows following the US-Israeli strikes on Iran and a jump in oil prices. It was up 0.07% at 99.93. Prior to the market opening, the People’s Bank of China set the midpoint rate at 6.8961 per dollar, 87 pips weaker than a Reuters’ estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. Analysts at Huatai Futures said higher global oil prices will feed through to China somewhat via imports, but the broader impact on growth and inflation should be relatively limited. They noted that coal and renewables have a larger share of the nation’s energy mix and the reliance on oil is lower than in Europe or Japan. The analysts expect the onshore yuan to trade in a 6.85-6.92 range, citing China’s exports and the PBOC’s fix remaining supportive for the currency. A material easing of Middle East tensions or clearer signals from the Federal Reserve on rate cuts could see the yuan break 6.85 and test around 6.82, they said. Investors are positioning for a heavy week of central bank meetings, including the Fed, European Central Bank, Bank of England and Bank of Japan. “The geopolitical premium currently embedded in the USD is vulnerable to monetary policy divergences that price in 1-2 rate cuts by the Fed versus expectations of a pause or rate hikes at other central banks,” DBS analysts said in a note. “Volatility can also increase again from any angry response from Trump against allies pushing for a diplomatic solution to the Iran conflict, with a breakdown in Western unity re-igniting a flight to safety,” the analysts. The offshore yuan traded at 6.8852 yuan per dollar, up about 0.06% in Asian trade.