By Summer Zhen

HONG KONG, Nov 28 (Reuters) - China's yuan was firmer

against the U.S. dollar on Thursday, as the greenback retreated

from a recent rally on investors' concerns over the risk that

President-elect Donald Trump will start a tariff war that no one

will win.

Interest in making big bets on the dollar also thinned ahead

of the U.S. Thanksgiving holiday.

Prior to the market opening, the People's Bank of China set

the midpoint rate, around which the yuan is allowed

to trade in a 2% band, at 7.1894 per dollar, its strongest since

Nov. 11 and 333 pips firmer than a Reuters' estimate.

The relatively stable onshore fixing rate through the

gyrations of the dollar indicated "Chinese authorities'

preference for a stable currency for now at least until better

clarity on Trump's tariff policies," Michael Wan, a senior

currency analyst at MUFG Bank said in a note.

Investors are still digesting Trump's pledges to impose a

25% tariff on all products from Mexico and Canada and an

additional 10% tariff on goods from China once he assumes office

in January, which could draw retaliation from those countries.

The move could drag the world's top two economies into a

mutually destructive tariff war, China state media warned on

Wednesday.

Spot yuan opened at 7.2380 per dollar and was

last trading 15 pips firmer than the previous late session close

and 0.78% weaker than the midpoint.

UBS Global Wealth Management expects the yuan to weaken

toward 7.5 against the dollar by the end of 2025 as the trade

war intensifies, even as China's central bank leans against yuan

depreciation by stabilizing its daily fixing rate against the

dollar.

J.P. Morgan economists said the yuan could depreciate

between 10% and 15% amid the tariff pressure in 2025, and

China's economic growth rate could be dragged by 1%.

The offshore yuan traded at 7.2513 yuan per dollar,

down about 0.09% in Asian trade.

The dollar's six-currency index was steadier at

106.2.

LEVELS AT 0338 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 7.245 0.02 -1.99 7.238 7.246

yuan 5 5