Yuan steady ahead of US inflation data, trade talks

SHANGHAI, Oct 24 (Reuters) - China's yuan remained largely flat against the dollar on Friday, trading narrowly as investors turned their attention to U.S. inflation data and a forthcoming high-level meeting between the leaders of the world's two largest economies.

The Chinese currency showed limited response to Beijing's newly unveiled five-year plan. On Thursday, the Communist Party vowed to build a modern industrial system and enhance efforts toward technological self-reliance, aiming to strengthen its position in its intensifying rivalry with the United States.

"There were few surprises from the fourth plenum's communique. It largely signals a continuation of recent policy priorities, with a somewhat greater emphasis on accelerating technological self-reliance and scientific skills," said Robert Gilhooly, senior emerging markets economist at Aberdeen Investments.

"Policy has recently sought to shore up consumption, but geopolitical pressure is likely to keep priorities biased to the supply-side of the economy, making it harder to shake off deflationary pressures, even if the authorities target sectors with well-known excess capacity problems, such as autos, solar and battery manufacturing," Gilhooly said.

The spot yuan CNY=CFXS opened at 7.1255 per dollar and was last trading at 7.1242 as of 0214 GMT, 7 pips lower than the previous late session close and 0.44% weaker than the midpoint.

U.S. President Donald Trump will meet Chinese President Xi Jinping next week as part of a trip to Asia, the White House said on Thursday, confirming the meeting which had been called into question following an escalation in trade tensions.

Investors are also watching for developments from U.S.-China trade negotiations taking place in Malaysia this weekend.

The U.S. dollar index =USD, which measures the greenback against a basket of currencies, added 0.1% to 99.00, as investors braced for Friday's consumer price figures for signals about next week's policy meeting at the Federal Reserve.

Prior to the market opening, the People's Bank of China set the midpoint rate CNY=PBOC at 7.0928 per dollar, 264 pips firmer than a Reuters estimate. The spot yuan is allowed to trade a maximum of 2% on either side of the fixed midpoint each day.

China has been guiding the yuan fix below 7.10 this month, signalling confidence ahead of upcoming U.S.-China trade talks, DBS analysts said in a note.

The offshore yuan traded at 7.1268 yuan per dollar CNH=, down about 0.01% in Asian trade.

LEVELS AT 0214 GMT