SHANGHAI, Sept 7 (Reuters) - The yuan edged up against the dollar on Monday helped by strong exports and firmer-than-expected central bank guidance that countered worries about a possible U.S. ban on China's Semiconductor Manufacturing International Corp (SMIC). China's exports rose for the third consecutive month in August, eclipsing an extended fall in imports, as more of its trading partners relaxed coronavirus lockdowns. The data suggests a more sustained recovery for the world's second-largest economy, which is rebounding from a record first-quarter slump helped largely by stimulus measures. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.8386 per dollar, 27 pips weaker than the previous fix of 6.8359. However, it was slightly firmer than market projections of 6.8420. Investors are trying to get a sense of whether the central bank is comfortable with the currency's recent sharp rally. The fixing lifted the yuan higher in the spot market. The onshore yuan opened at 6.8300 per dollar and was changing hands at 6.8290 at midday, 145 pips firmer than the previous late session close. Bets on a stronger yuan are mounting in spite of some risk factors, dealers said. Policies aimed at reviving China's economy through domestic demand and foreign investment could add further momentum to a currency that has risen more than 4% against the dollar since the end of May. Curbing bullish sentiment, however, were reports that China's SMIC could be added to the Trump Administration's trade blacklist in a sign of rising tensions between Beijing and Washington. "Over the long run, the dollar weakening trend has not changed. But market needs to pay attention to risk factors including the epidemic, U.S. presidential election and geopolitics," analysts at China Construction Bank (Asia) said in a note, warning it could face some selling pressure at 6.83 per dollar. The global dollar index fell to 92.869 at midday, when the offshore yuan was trading at 6.8306 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.8386 6.8359 -0.04% Spot yuan 6.829 6.8435 0.21% Divergence from -0.14% midpoint* Spot change YTD 1.97% Spot change since 2005 21.20% revaluation Key indexes: Item Current Previous Change Thomson 93.39 93.22 0.2 Reuters/HKEX CNH index Dollar index 92.869 92.876 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% from official midpoint rate it sets each morning. OFFSHORE CNH MARKET Instrument Current Difference from onshore Offshore spot yuan 6.8306 -0.02% * Offshore 6.9786 -2.01% 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 Jacqueline Wong)
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