SHANGHAI, May 14 (Reuters) - China"s yuan inched higher against the dollar on Friday, following a firmer official guidance rate, but the local unit looked set for the first weekly loss in six. The Chinese yuan took a breather after a volatile week, by strengthening to a near three-year high before giving back most of the gains, with traders attributing the sharp fluctuations mostly to the dollar"s movements in global markets following surprising U.S. data. The dollar stabilised against a basket of currencies on Friday as investors tried to assess the risk of U.S. inflation rising faster than expected and prodding the Federal Reserve to hike interest rates sooner. The spot yuan calmed as well. The onshore market opened at 6.4485 per dollar and was changing hands at 6.4450 at midday, 94 pips firmer than the previous late session close. If the yuan finishes the late night session at the midday level, it would have lost 0.22% to the dollar for the week, snapping five straight weeks of gains. The spot yuan traded just above the key 6.45 per dollar level and swung in an extremely tight range of about 50 pips in morning trade, with several traders expecting the yuan to remain tracking the broad dollar movements in the near term. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.4525 per dollar, 87 pips or 0.13% firmer than the previous fix of 6.4612. Many traders and analysts said their projections for the midpoint showed larger errors this week, suggesting official attempts to stabilise the market. "The PBOC has been setting USD/CNY fixing higher-than-expected for five consecutive sessions but in a decreasing degree, aimed at smoothing movements in the yuan exchange rate when U.S. employment and inflation data sparked market volatility," Gao Qi, FX strategist at Scotiabank in Singapore, said in a note. Some traders also pointed out that seasonal corporate demand for the greenback could bring some volatility to the yuan. Overseas-listed Chinese companies usually have to make their interim dividend payments between May and August, and such seasonal FX purchases could pile downward pressure on the yuan. Standard Chartered had expected total dividend payments would reach $84 billion this year. Separately, markets would switch attention to a medium-term loan operation next week to gauge PBOC"s policy stance. A batch of 100 billion yuan worth of medium-term lending facility (MLF) is set to expire on Monday, with markets expecting the PBOC to roll it over. Investors expect the cost of MLF loans is unlikely to change, but the volume could offer some monetary policy outlook after the PBOC kept injecting a minimal daily 10 billion yuan through reverse repos in open market operations for 53 straight trading days, as of Friday. The global dollar index fell to 90.718 by midday from the previous close of 90.757, while the offshore yuan was trading at 6.446 per dollar. The yuan market at 0400 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4525 6.4612 0.13% Spot yuan 6.445 6.4544 0.15% Divergence from -0.12% midpoint* Spot change YTD 1.29% Spot change since 2005 28.42% revaluation Key indexes: Item Current Previous Change Thomson 97.46 97.36 0.1 Reuters/HKEX CNH index Dollar index 90.718 90.757 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 6.446 -0.02% * Offshore 6.6083 -2.36% 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 Winni Zhou and Andrew Galbraith; Editing by Stephen Coates) Our Standards: The Thomson Reuters Trust Principles.