SHANGHAI, Nov 7 (Reuters) - China's yuan inched up against the U.S. dollar on Tuesday, in line with the central bank's slightly stronger midpoint fix, following a fall in the greenback. The dollar slipped from a 10-day peak against a basket of currencies on Tuesday morning, dragged by doubts over whether the U.S. Republicans can pass their tax plans in a timely manner. The global dollar index, a gauge that measures the dollar strength against six other major currencies, fell to 94.738 from the previous close of 94.757. It hit a 10-day peak of 95.077 on Monday. Prior to market opening on Tuesday, the People's Bank of China (PBOC) raised its midpoint to 6.6216 per dollar, 31 pips or 0.05 percent firmer than the previous fix of 6.6247 on Monday. The yuan opened in the spot market at 6.6260 per dollar and was changing hands at 6.6236 at midday, 103 pips firmer than the previous late session close. Traders said spot yuan fluctuated in a thin range with corporate dollar supply and demand largely balanced in morning trade. Some market participants expected the yuan to trade between 6.62 and 6.64 per dollar in the near term as dollar buying interest was at 6.62 with offering interest at the 6.64 level. Trade is expected to be thin during the U.S. President Donald Trump's Nov.8-10 Beijing visit, traders said, because the market would turn cautious. Currency strategists say that in the days around Trump's visit they expect the PBOC to prop up the yuan. China is due to publish October foreign exchange reserves data later on Tuesday, with a Reuters poll finding the reserves were expected to have risen for a ninth month to $3.118 trillion as capital curbs and a weakening dollar helped staunch fund outflows. The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 96.01, weaker than the previous day's 96.02. The offshore yuan was trading 0.01 percent firmer than the onshore spot at 6.6228 per dollar. Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.777, 2.29 percent weaker than the midpoint. One-year NDFs are settled against the midpoint, not the spot rate.
The yuan market at 0359 GMT:
Item Current Previous Change PBOC midpoint 6.6216 6.6247 0.05% Spot yuan 6.6236 6.6339 0.16% Divergence from 0.03%
Spot change YTD 4.88% Spot change since 2005 24.95%
Item Current Previous Change Thomson 96.01 96.02 0.0
Reuters/HKEX CNH index
Dollar index 94.738 94.757 0.0
*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 2 percent from official midpoint rate it sets each morning.
OFFSHORE CNH MARKET
Instrument Current Difference
Offshore spot yuan 6.6228 0.01% * Offshore 6.777 -2.29%
*Premium for offshore spot over onshore
**Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint. .
(Reporting by Winni Zhou and John Ruwitch; Editing by Eric Meijer)