China's yuan slipped against the dollar on Monday, as market participants adopted a cautious approach ahead of key economic data and policy meetings for more clues on the health of the broader economy. China has reported mixed factory activity data for November, according to official and private surveys, raising doubts on whether recent stimulus measures are sufficient to bolster a fragile economic recovery. China is due to report trade and inflation data later this week.

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 a six-month high of 7.1011 per dollar, 93 pips firmer than the previous fix of 7.1104. The official fixing extended a months-long trend of being set at levels much stronger than market forecasts, which has been widely interpreted by traders as an attempt by authorities to keep the currency stable. Monday's midpoint was 260 pips firmer than Reuters estimate of 7.1271. "The strong yuan fix continues to convey a message of support for the yuan as domestic demand remain fragile and China's property market continues to struggle to find a foothold," Maybank analysts said in a note. In the spot market, the onshore yuan opened at 7.1270 per dollar and was changing hands at 7.1323 at midday, 48 pips weaker than the previous late session close. Its offshore counterpart was trading at 7.1343 per dollar around midday.

Dealers said that besides the looming China data, the currency market was also waiting for more external guidance including from the Federal Reserve amid firming bets the U.S. rate-hike cycle was over. A broadly weaker dollar has allowed the yuan to recover some lost ground, with the Chinese currency gaining nearly 2.6% to the dollar in November to book the best monthly performance this year. However, it is still down 3% year-to-date. Chinese companies, especially exporters, convert more of their foreign exchange receipts into the yuan towards the year-end and Lunar New Year for various payments, including year-end bonus handouts to their employees. While these customary settlements support the local currency, the underlying fragility of the economy and the wide China-U.S.

interest rate gap continue to keep yuan bears active. Market attention also will be switched to the upcoming Politburo meeting and the annual Central Economic Work Conference, which usually discuss policy plans and the outlook for the world's second-largest economy. "We expect policymakers to set an ambitious growth target for 2024, plan a larger volume of government bond issuance, and keep other economic targets such as inflation and employment targets unchanged," analysts at Goldman Sachs said in a note.

The yuan market at 0309 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 7.1011 7.1104 0.13% Spot yuan 7.1323 7.1275 -0.07% Divergence from 0.44% midpoint* Spot change YTD -3.26% Spot change since 2005 16.04% revaluation Key indexes: Item Current Previous Change Thomson 0.0 Reuters/HKEX CNH index Dollar index 103.214 103.268 -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 7.1343 -0.03% * Offshore 6.9535 2.12% 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 Shanghai Newsroom Editing by Shri Navaratnam)