Wall Street in focus after China fixes yuan at stronger than expected level

The U.S. stock index futures were higher on Monday morning, after China's central bank benchmarked the yuan official reference level at a stronger-than-expected level.

Around 02:30 am ET, Dow futures rose 46 points, indicating a positive open of more than 55 points. Futures for S&P and Nasdaq were both slightly higher.

The market focus is largely aligned to simulate trade tensions between the world's two largest economies.

On Monday, the People's Bank of China (PBOC) set its daily midpoint for yuan trade – which determines land movement limits ̵[ads1]1; at 7.0211 per dollar. This was weaker than Friday's session, but beat the market's expectations.

Market participants have been monitoring the dollar / yuan exchange rate closely following an escalation in trade tensions between Washington and Beijing.

The yuan weakened past the 7-dollar level last week for the first time since the global financial crisis in 2008. The move prompted the US Treasury to designate China as a currency manipulator.

A weaker currency makes a country's exports cheaper and President Donald Trump's administration has consistently complained that a cheaper yuan would give China a trade advantage.

The US President said on Friday that the United States would continue to hold talks with Beijing, but that Washington was not prepared to make a deal for now.

About the data above, the federal budget for July is expected to be published around 10 p.m. 2 PM ET.

In corporate news, both Sysco and Barrick Gold are expected to publish quarterly earnings before the opening clock.

Bloom Energy and Tencent Music will report the latest results after the end of the market.

– CNBC's Saheli Roy Choudhury contributed to this report.

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