* PBOC sets midpoint stronger, guides yuan up 0.01 pct     * No PBOC intervention as dollar supply/demand balanced - traders     * China's foreign trade in difficulty - commerce ministry official     * Yuan seen moving narrowly throughout Q2      By Lu Jianxin and Pete Sweeney     SHANGHAI, May 20 (Reuters) - China's yuan edged higher against the dollar on Tuesday after the central bank set a slightly firmer midpoint, signalling its intention to keep the currency stable for now, traders said.     Spot yuan  
  CNY=CFXS
   stood at 6.2370 per dollar by midday, up 0.01 percent from Monday's close, after the People's Bank of China (PBOC) set its official midpoint at 6.1626, or 0.02 percent stronger than Monday.     Traders reported a rough balance of dollar supply and demand in the domestic market, with the PBOC staying on the sidelines as the yuan remained stable.     The Chinese currency was seen having limited room to weaken further, as it did earlier this year, but also little leeway for gains in the near term, partly due to China's weak trade outlook.     A senior commerce ministry official said on Tuesday that   China faced an arduous task achieving its 7.5 percent trade growth target this year as the high growth period was over.     Zhang Ji, head of the foreign trade department at the Ministry of Commerce, told a news conference that violence against Chinese firms in Vietnam could also hurt bilateral trade.  
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       Last week, China's cabinet announced a raft of measures to support the wobbly trade sector, including giving more tax breaks, credit insurance and currency hedging options to its exporters.  
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       The yuan has rebounded 0.3 percent against the dollar so far in May after the central bank engineered a 3.3 percent depreciation in the currency in the first four months of this year to deter speculators from betting on a non-stop yuan rise.     Before this year's unexpected depreciation, the yuan had steadily appreciated by more than 30 percent since its landmark revaluation in 2005. Many market participants believe the redback is close to its equilibrium level while two-way fluctuations will be the new norm.  
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                 The onshore spot yuan market at a glance:   Item                       Current    Previous  Change (pct)  PBOC midpoint  
  CNY=SAEC
     6.1626     6.1636      0.02  Spot yuan  
  CNY=CFXS
         6.2370     6.2374      0.01  Divergence from midpoint*  1.21                   (pct)                                             Spot change ytd                                 -2.94  Spot change since 2005                          32.70  revaluation                                        *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.      The offshore yuan market at a glance:  Instrument                     Current  Difference                                          from onshore                                          (pct)  Offshore spot yuan  
  CNH=D3
      6.2361   0.01  Offshore non-deliverable       6.2390   -1.22  forwards  
  CNY1YNDFOR=
                      *Premium for offshore spot over onshore  
  CNY=CFXS
   **Figure reflects difference from PBOC's official midpoint, since non-deliverable forwards are settled against the midpoint.  
  CNY=SAEC
  .           >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>     RECENT DEVELOPMENTS     - China seen able to tell U.S. that yuan is near fair value  
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       - US warns China over currency depreciation  
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       - Capital flows, improving trade to prop up yuan in H2 
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          - Dim sum bonds mark record quarter in Hong Kong  
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       - New quotas rekindle debate over dim sum market's future  
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        - Flood of offshore yuan bonds may spark higher yields  
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                KEY DATA POINTS     - Yuan spot performance versus midpoint after trading band widened 
  http://link.reuters.com/jyz38v
      - China's yuan, other emerging mkt currencies vs dollar 
  http://link.reuters.com/xyd46v
      - Global currency performance INTERACTIVE GRAPHIC: 
  http://link.reuters.com/cyx46v
      - China's trade surpluses mainly driven by weak imports rather than strong exports. GRAPHIC: 
  http://link.reuters.com/qav68s
      - Despite relatively stable dollar/yuan exchange rate, the yuan is appreciating on a trade-weighted basis. GRAPHIC: 
  http://link.reuters.com/sed74t
       >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>      (Editing by Jacqueline Wong)  ((jianxin.lu@thomsonreuters.com)(86 21 6104 1792)(Reuters Messaging: jianxin.lu.thomsonreuters.com@reuters.net))  Keywords: MARKETS CHINA YUAN MIDDAY/