Yuan steady, Q2 economic data delivers slight support
* Dollar supply/demand roughly balanced
* China's GDP grows 7.5 pct in Q2 in line with forecast
* Yuan seen moving narrowly around current levels for now
* Government acts to cool market jitters over growth
SHANGHAI, July 15 (Reuters) - The yuan edged higher against the dollar on Monday after China posted second-quarter economic growth within expectations, easing jitters over the health of the world's second-largest economy. Spot yuan was trading at 6.1368 versus the dollar at noon, inching up 0.01 percent from Friday's close, despite the People's Bank of China (PBOC) setting its daily midpoint at 6.1663, 0.05 percent weaker than Friday's fix. Traders said market supply and demand for dollars was roughly balanced on Monday, although corporates have become more inclined to keep dollars on hand in recent weeks amid worries over the pace of China's economic recovery. Gross domestic product growth slowed in the second quarter to 7.5 percent year-on-year from 7.7 percent in the first quarter, the National Bureau of Statistics said, but was in line with a Reuters poll.
The onshore spot yuan market at a glance:
Item Current Previous Change PBOC midpoint 6.1663 6.1631 -0.05% Spot yuan 6.1368 6.1375 +0.01% Divergence from -0.48%
Spot change ytd +1.52% Spot change since 2005 revaluation +34.87%
*Divergence of the dollar/yuan exchange rate. Negative number indicates that spot yuan is trading stronger than the midpoint. The People's Bank of China (PBOC) allows the exchange rate to rise or fall 1 percent from official midpoint rate it sets each morning.
OFFSHORE CNH MARKET
The offshore yuan market at a glance:
Instrument Current Difference from onshore Offshore spot yuan 6.1401 -0.06%* Offshore non-deliverable 6.2845 -1.88%**
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. .
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> RECENT DEVELOPMENTS - ANALYSIS-China exports slide raises doubts about currency policy - CHINA MONEY-Faltering exports could mean flat yuan or worse in H2 - Yuan rally starts to fade as capital inflows to China slow
- ANALYSIS-Bullish yuan herd leaves China fundamentals in the dust - Currency war or no, Beijing doesn't want Asia to take stable yuan for granted - China opens new front in money war as yuan speculation distorts export data
KEY DATA POINTS - Gap between PBOC midpoint and spot rate is narrowing. GRAPHIC: http://link.reuters.com/qyx74t - China's trade surpluses mainly driven by weak imports rather than strong exports. GRAPHIC: http://link.reuters.com/qav68s - Corporate FX purchases in May show reduction in yuan appreciation expectations. GRAPHIC: http://link.reuters.com/tyx74t - Hot money inflows turn to outflows in May GRAPHIC: http://link.reuters.com/saz74t - Despite relatively stable dollar/yuan exchange rate, the yuan is appreciating on a trade-weighted basis. GRAPHIC: http://link.reuters.com/sed74t
(Editing by Sanjeev Miglani)