US President Donald Trump and Chinese President Xi Jinping (R) arrive prior to a meeting on the sidelines of the G20 Summit in Hamburg, Germany, July 8, 2017.

China trimmed its holdings of U.S. Treasurys in August by about $6 billion, to the lowest level since June 2017.

China's holdings of Treasury bills, notes and bonds fell to $1.165 trillion, from $1.171 trillion in July, according to U.S. Treasury data. It is the third month of decline, and well below the recent high of $1.2 trillion a year earlier.

Bond traders have been watching to see if China is intentionally reducing its holdings of U.S. Treasurys because of friction over the trade spat with the U.S., but market pros do not believe the reduction is meaningful. It also came at a time of currency volatility this past summer.

"The fact you're seeing a slow downward drift is not surprising," said Jon Hill, U.S. rates strategist at BMO. He said Chinese holdings are now the lowest since June 2017, when they were at $1.147 trillion. "