China tries to cool yuan dispute with U.S.

Investors have this week scaled back their bets on any imminent move on the view that Beijing will find it politically unpalatable to appear to cave into U.S. pressure.

The yuan was bid just a touch above a three-week low in offshore forwards on Friday, implying expectations of 2.5 percent appreciation over the next 12 months.

The burst of rancour with the United States has grabbed headlines over the past week, but China is the world's largest exporter and the yuan's exchange rate is an issue that affects virtually all countries.

Visiting Washington, Indian Commerce and Industry Minister Anand Sharma said China's exchange rate policy created problems for Indian exporters.

In a discussion paper for a meeting of officials from the Group of 20 industrialised and emerging nations, Canada said that stalling on economic and financial reforms agreed at a G20 summit in Pittsburgh last year would bring unsustainable debt levels, higher interest rates and another crisis.

(Writing by Simon Rabinovitch; Editing by Ken Wills and Kazunori Takada)