(Recasts, new throughout; adds analyst quote)
By Kate Duguid
NEW YORK, Aug 13 (Reuters) - The U.S. dollar and offshoreyuan rose on Tuesday after the Trump administration said itwould delay 10% tariffs on some Chinese products scheduled tobegin next month, a significant concession in the trade conflictbetween Washington and Beijing.
The U.S. Trade Representative said it would delay tariffs onlaptops and cellphones, among other products, set to be imposedin September.
The U.S. dollar clobbered the Japanese yen, last up1.28% to 106.65 yen per dollar. The yen is a safe-haven assetwhich benefits in moments of geopolitical uncertainty and duringeconomic downturns. The dollar index was 0.45% higher at97.815, and the offshore Chinese yuan was 1.25% strongerat 7.0125.
Some analysts said they did not expect the currency trendsto continue overnight.
"The huge positioning squeeze, notably on gold and yencrosses, inclusive of CNH, after the latest news should belargely done," said Alan Ruskin, chief international strategistat Deutsche Bank.
"It is still entirely possible that rather than a resolutionto the trade dispute, both sides live with a 'new normal' with aworld of elevated tariffs, that may have carve-outs forpolitically sensitive goods."
Other safe havens like Treasury debt also saw prices fall asinvestors moved money into riskier assets. The spread between 2-and 10-year Treasury yields, the best-knownmeasure of the yield curve, fell as low as 0.6 basis point, itsflattest in more than 12 years. An inversion of the yield curve- when the spread falls below zero - is an indicator of comingrecession.
The curve flattened because 2-year Treasury yields, which move with market expectations of interest ratepolicy, rose as rate-cut bets were tempered.
Two to three rate cuts have been priced in by the end of theyear, though on Tuesday expectations of two rate cuts increasedto 49.3% from 45.7% a day prior, according to CME Group'sFedWatch tool, and bets on three cuts fell from 36.1% to 32.8%.
The U.S. dollar was also buoyed on Tuesday after the UnitedStates reported that consumer prices in July increased, thoughthe easing of trade tensions could tamp down furtherinflationary pressures.
Financial markets have fully priced in an interest rate cutin September. Expectations that rates will be cut by 25 basispoints rose to 95.0% from 84.6% a day prior as fewer traders beton a more dramatic 50-basis-point cut next month.(Reporting by Kate Duguid in New York and Tommy Wilkes inLondon; editing by Jonathan Oatis)