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China unveils biggest stimulus measures since pandemic

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Dollar falls to 16-month low vs yuan

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RBA holds rates steady, softens hawkish stance

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Dollar index extends decline after soft consumer

confidence data

(Updated at 2:41 a.m. ET/1841 GMT)

By Chuck Mikolajczak

NEW YORK, Sept 24 (Reuters) - China's yuan hit a

16-month high against the U.S. dollar on Tuesday, after the

central bank of the world's second-largest economy revealed new

stimulus measures, while the greenback extended declines against

other major currencies after soft data on the consumer.

Beijing's new plan includes a planned 50 basis point cut to

banks' reserve requirement ratios, injecting more funds into the

economy and an easing of mortgage repayments for households.

The Chinese yuan strengthened 0.65% against the

greenback to 7.017 per dollar after reaching 7.0156 on the

session.

"It hit all the things that people wanted to see - more support

for the housing market, lower interest rates, reserve rate cut

and that support for the stock market," said Marc Chandler,

chief market strategist at Bannockburn Global Forex in New York.

"At least initially the market is giving Beijing the

benefit of the doubt ... I'm not convinced that the underlying

problems, the underlying challenges are really being addressed."

The dollar index extended declines after economic data from

the Conference Board showed U.S. consumer confidence

unexpectedly fell

in September to 98.7 from an upwardly revised 105.6 in

August and below the 104.0 estimate of economists polled by

Reuters as worries over the health of the labor market grew.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

fell 0.44%, on track for its biggest daily percentage drop in

two weeks, to 100.49. The dollar had fallen for three straight

weeks on expectations for a rate cut from the Federal Reserve,

which delivered an upsized 50 basis point cut last week.

The euro climbed 0.46% at $1.1163.

Multiple Fed officials are scheduled to speak this week

including Fed Chair Jerome Powell as well as Governors Lisa Cook

and Adriana Kugler.

Governor Michelle Bowman, the lone dissenter in last week's

Fed move in calling for a 25 basis point cut,

said on Tuesday

that key measures of inflation remain "uncomfortably above"

the Fed's 2% target, warranting caution as the Fed proceeds with

its easing cycle.

The Australian dollar strengthened 0.63% versus the

greenback to $0.6881, touching a 14-month high of $0.6885 after

the country's central bank reiterated that interest rate cuts

were unlikely in the near term as it held policy steady, but

softened its hawkish stance by saying monetary tightening was

not discussed.

Analysts at Goldman Sachs said that they consider the RBA's

decision not to explicitly consider a rate cut "as a mini pivot

in the dovish direction."

Policy announcements are also expected from the Swiss

National Bank, which is expected to cut by 25 bps, and Riksbank,

which is also seen cutting by 25 bps, this week.

Against the Japanese yen, the dollar weakened 0.13%

to 143.42 after Bank of Japan Governor Kazuo Ueda reiterated in

a speech on Tuesday the central bank can "afford to spend time"

scrutinizing developments in markets and overseas economies

before tightening policy further.

Sterling strengthened 0.37% to $1.3395.