SHANGHAI - China's yuan was roughly flat against the dollar on Tuesday, as traders took stock of the economic impact from fresh COVID-19 clusters and government efforts to support the struggling property sector.

The market was also closely monitoring approaching central bank meetings, and Wednesday's setting of China's benchmark lending rates, which some expect to remain unchanged.

The onshore yuan was changing hands at 6.7472 at midday, slightly weaker than the previous late session close, after China's central bank set a softer midpoint rate.

China reported 776 new coronavirus cases, sparking fears of renewed restrictions on activity to curb outbreaks. But the concern was offset by investor optimism that the Chinese government had taken initiatives to stabilise the beleaguered property sector, where a wave of homebuyers have refused to repay mortgages on unfinished homes.

"Overall, the property market rout is far from settling down and optimism may evaporate quickly," cautioned Ken Cheung, strategist at Mizuho Bank Ltd. "It will take time to rebuild confidence in the property sector and complete the unfinished residential projects."

Central bank moves are also in focus. Markets are expecting a 75 basis point interest rate hike at the U.S. Federal Reserve's meeting next week, moving away from earlier bets that rates could rise as much as 100 basis points.

China, which has been easing monetary policy to spur growth, will set the benchmark Loan Prime Rate (LPR) on Wednesday. Swiss bank UBP expects China to keep its one-year LPR fixing unchanged at 3.7%.

"The window to cut rates has now closed, as CPI edges closer to PBOC's 3.0% target amid peak Fed hawkishness," UBP wrote, referring to the People's Bank of China (PBOC).

MayBank said in a note that mixed risk narrative - housing and COVID risks in play while authorities commit to stronger economic support - amid broader dollar swings could lead the yuan to see more two-way swings in the near term.

(Reporting by Shanghai Newsroom; Editing by Jacqueline Wong)