China's yuan hovered near a 3-1/2-year high against the dollar on Monday, supported by diminishing expectations of a US interest rate hike in October, although rising trade tensions and a widening yield gap between the two economies could limit further gains. The onshore yuan edged higher to 6.6920 per dollar in late-morning trading. Before the market opened, the People's Bank of China set the daily midpoint at 6.7313 per dollar, its strongest level since February 2, 2023.