China's yuan rose slightly against the dollar on Thursday, underpinned by robust northbound inflows into Chinese stocks, while investors awaited the annual meeting of the country's parliament and key U.S. data for more clues on the economic agenda for this year. A-share performance has affected broader financial market sentiment over the past few months, traders said, and inflows of about 13 billion yuan ($1.81 billion) through the northbound stock trading link in morning trades supported the currency. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1036 per dollar, 39 pips firmer than the previous fix of 7.1075.

The central bank continued its months-long practice of setting the rate at levels firmer than market projections, widely viewed by traders as an attempt to keep the currency stable. Thursday's midpoint was 902 pips firmer than a Reuters estimate of 7.1938. In the spot market, the onshore yuan opened at 7.1945 per dollar and was changing hands at 7.1949 at midday, 27 pips firmer than the previous late session close. Traders said the U.S. core personal consumption expenditures price index - the Federal Reserve's preferred measure of inflation - due later in the session is expected to shed light on the trajectory of monetary policy in the world's largest economy.

Next week, China's National People's Congress (NPC) will convene on March 5, when investors will pay close attention to a series of economic targets and policy priorities for this year. "We continue to expect an ambitious growth target of around 5% of real GDP growth and more supportive fiscal policy this year," analysts at Goldman Sachs said in a note. "Key topics to monitor during this year's 'Two Sessions' include discussions about the government's 'new model' for the property sector, local government financing and fiscal reforms, as well as other demand-side stimulus such as support to consumption." By midday, the global dollar index fell to 103.852 from the previous close of 103.975, when the offshore yuan was trading at 7.2081 per dollar.

The yuan market at 0351 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 7.1036 7.1075 0.05% Spot yuan 7.1949 7.1976 0.04% Divergence from 1.29% midpoint* Spot change YTD -1.35% Spot change since 2005 15.03% revaluation Key indexes: Item Current Previous Change Thomson 0.0 Reuters/HKEX CNH index Dollar index 103.852 103.975 -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 7.2081 -0.18% * Offshore 6.9955 1.55% 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. . ($1 = 7.1946 Chinese yuan) (Reporting by Shanghai Newsroom; Editing by Sonali Paul)