SHANGHAI, Sept 11 (Reuters) - The yuan eased on Friday, tracking slight strength in the U.S. dollar and a softer central bank guidance rate, but the Chinese currency still looked set to firm for the seventh week in a row, extending its longest winning streak since early 2018. Prior to the market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8389 per dollar, 58 pips weaker than the previous fix of 6.8331. The onshore yuan opened at 6.8389 per dollar and was changing hands at 6.8388 at midday, 50 pips weaker than the previous late session close. Trading was thin and the currency kept to an extremely tight range of 90 pips. Traders said they expected it to continue consolidating around current levels, passively reacting to dollar's movements and official midpoint for the time being. If the yuan finishes the late night session at the midday level, it would edge up 0.07% to the dollar for the week, taking its gains so far this year to 1.8%. Its current streak has been the longest since December 2017 to February 2018, when it firmed nine weeks in a row. "Performance of the U.S. stocks and Sino-U.S. relations will remain the key external uncertainty deciding the yuan's movements," analysts at China Construction Bank (Asia) said in a note. "The yuan will maintain consolidating in the short term to react to a stabilising dollar and volatile U.S. stocks." A trader at a Chinese bank said the market lacked clear guidance for now, with many investors likely to shift their attention to the Federal Reserve's policy meeting next week for clues on the U.S. central bank's monetary policy trajectory. Strong measures to boost economic recovery in the world's largest economy could affect dollar and major currencies. The dollar was poised for its first back-to-back weekly gains since May on Friday as jitters in equity markets had investors sticking to safer assets. The global dollar index traded at 93.263 at midday, when the offshore yuan was trading at 6.8391 per dollar. The yuan market at 0404 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.8389 6.8331 -0.08% Spot yuan 6.8388 6.8338 -0.07% Divergence from 0.00% midpoint* Spot change YTD 1.82% Spot change since 2005 21.02% revaluation Key indexes: Item Current Previous Change Thomson 93.42 93.33 0.1 Reuters/HKEX CNH index Dollar index 93.263 93.345 -0.1 *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% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.8391 0.00% * Offshore 6.9992 -2.29% non-deliverable forwards ** *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 Andrew Galbraith; Editing by Kim Coghill)
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