SHANGHAI, April 2 (Reuters) - China"s yuan inched up against the dollar on Friday, while investors eyed U.S. jobs data that could indicate the pace of recovery in the world"s largest economy for more trading cues. But the yuan stayed on course for a seventh weekly drop, the longest such streak since 2018, hit by a broad dollar strength. The U.S. nonfarm payroll data, due later in the day, could confirm the market view of a steady U.S. economic recovery and prop up the dollar further, bringing volatility to other major currencies, several yuan traders said. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.5649 per dollar, 65 pips or 0.1% weaker than the previous fix of 6.5584. In the spot market, onshore yuan opened at 6.5661 per dollar and was changing hands at 6.5625 at midday, 30 pips firmer than the previous late session close. Many market participants have squared their books before the U.S. jobs data and the upcoming April 3-5 Tomb Sweeping holiday, while overseas markets lack guidance as investors are away for Easter holidays, some currency traders said. "As USD/CNY is now increasingly reactive to the dollar index, and COVID is yet to be under control in the U.S. and Europe, we are revising our forecast of USD/CNY to 6.30 from 6.20 by the end of 2021," said Iris Pang, chief economist for Greater China at ING. The global dollar index is set for its third week of gains on prospects of a solid economic recovery due to accelerating vaccinations and massive fiscal stimulus. Some other economists believed the continued capital inflows following Chinese government bond"s inclusion into global indexes and relatively wide yield advantage between China and other major economies were still supportive of the yuan. "The CNY is likely to remain supported by China"s solid economic recovery and increasing capital inflows," said Li Wei, senior China economist at Standard Chartered. "While the USD may rebound modestly near-term on a strong U.S. economic recovery, weak fundamentals – including record trade and fiscal deficits – are likely to weigh on the USD in the medium term," he added. He maintained his forecast for the yuan to trade at 6.4 per dollar at end-June but ease to 6.45 at end-2021. The dollar index fell to 92.865 at midday, while the offshore yuan was trading at 6.5694 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.5649 6.5584 -0.10% Spot yuan 6.5625 6.5655 0.05% Divergence from midpoint* -0.04% Spot change YTD -0.52% Spot change since 2005 revaluation 26.12% Key indexes: Item Current Previous Change Thomson Reuters/HKEX CNH index 96.59 96.63 0.0 Dollar index 92.865 92.898 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 * 6.5694 -0.11% Offshore non-deliverable forwards ** 6.7505 -2.75% *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