By Summer Zhen
       HONG KONG, July 3 (Reuters) - China's yuan skidded to a
seven-month low against the dollar on Wednesday on weak economic
data and as the central bank nudged the currency's trading range
a little bit lower.
        At 0410 GMT, the yuan was down about 0.03% at
7.2733 and had traded as low as 7.2736, the weaker end of its
daily trading band.
    The yuan is down 2.4% on the U.S. dollar this year as
China's economic recovery has disappointed and rock-bottom bond
yields have driven money away and into higher yielding
currencies.
    The Caixin/S&P Global services purchasing managers' index
(PMI) released on Wednesday fell to 51.2 from 54.0 in May,
marking the lowest reading since October 2023.
    Despite a small fall for the dollar overnight, the People's
Bank of China (PBOC) fixed the midpoint rate, around
which the yuan is allowed to trade in a 2% band, at 7.1312 per
dollar, its weakest since Nov. 21, 2023.
    "Market participants perceived PBOC's policy signal to
unleash CNY depreciation pressure," said Mizuho currency
strategist Ken Cheung in a note to clients.
    "It appears that the PBOC is comfortable with the current
pace of depreciation."
    Analysts said a looming U.S. presidential election where
both major party candidates are taking a tough stance on
relations with China was also putting downward pressure on the
currency.
    President Joe Biden's administration has revoked eight
licences this year that had allowed some companies to ship goods
to Chinese telecoms equipment giant Huawei, according to a
document first reported by Reuters. The U.S. also added six
companies to its trade restriction list on Tuesday, including
four for their links to the training of China's military forces.
    The second half is likely to bring geopolitical risks facing
the Chinese yuan to the fore more forcefully as the U.S.
election nears, Luis Oganes, head of global macro research at
JPMorgan, wrote in a note.
    
    Key onshore vs offshore levels:
Overnight dollar/yuan swap onshore -15.50 pips vs. offshore
-15.50
Three-month SHIBOR 1.9 % vs. 3-month CNH HIBOR 3 %
 

LEVELS AT 03:19 GMT 
    
 INSTR  CURRE  UP/DO  %      DAY'S  DAY'S
 UMENT  NT vs  WN(-)  CHANG  HIGH     LOW
        USD    VS.    E             
               PREVI  YR-TO         
               OUS    -DATE         
               CLOSE                
               %                    
 Spot   7.273  -0.03  -2.36  7.271  7.273
 yuan   4                               6
                                 
 
 (Reporting by Summer Zhen; Editing by Jamie Freed)