SHANGHAI, June 28 (Reuters) - China"s yuan weakened on Monday as the U.S. dollar held firm on persistent investor expectations that inflation in the world"s largest economy could push the Federal Reserve to tighten monetary policy. Investors remained worried after data last week showed the so-called core PCE price index, the Fed"s favourite gauge of inflation, jumped 3.4% on-year in May, the largest gain since April 1992. But traders and analysts said they expect a quiet week for the yuan ahead of the centenary of the founding of China"s Communist Party on Thursday. "The dollar index isn"t going to be too weak while the Fed discusses tapering quantitative easing. But the yuan is also relatively stable ahead of the big day ... Later we"ll need to keep an eye on non-farm payrolls," said a trader at a foreign bank. U.S. non-farm payrolls data, which will give investors further insight into the state of that country"s economic recovery, is due for release Friday. Before the market open, the People"s Bank of China (PBOC) set the yuan"s daily midpoint rate at 6.4578 per dollar, its firmest level in a week, after the currency strengthened on Friday. Spot yuan opened at 6.4610 per dollar and was changing hands at 6.4623 at midday, 73 pips weaker than Friday"s late session close. The offshore yuan softened to 6.466 per dollar from a close of 6.4550 and the global dollar index rose to 91.845 from the previous close of 91.767. Ken Cheung, chief Asian FX strategist at Mizuho Bank, said that the PBOC was being "supportive" ahead of the Communist Party centennial, and that its recent increase in daily cash injections were helping to keep liquidity conditions stable. On Monday, the PBOC injected a net 20 billion yuan through its regular open market operations for the second consecutive trading day, after breaking a nearly four-month uninterrupted streak of 10 billion yuan daily injections on Friday. Friday"s injection pulled the volume-weighted average rate of the benchmark interbank market seven-day repo to 1.5250% on Friday from 2.3118% on Tuesday. On Monday, the rate edged up to 1.5566%. But Cheung said market dynamics following the centenary are uncertain, and questions over China"s growth momentum could weigh on the yuan. "Local hard data flow had been moderating and (the) China growth picture appears to remain uneven, with the slow recovery in consumption," he said, adding that export growth will also face downward pressure as supply chains in Southeast Asia normalise. The yuan market at 4:01AM GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4578 6.4744 0.26% Spot yuan 6.4623 6.455 -0.11% Divergence from 0.07% midpoint* Spot change YTD 1.02% Spot change since 2005 28.07% revaluation Key indexes: Item Current Previous Change Thomson 97.78 97.83 -0.1 Reuters/HKEX CNH index Dollar index 91.845 91.767 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 6.466 -0.06% * Offshore 6.6314 -2.62% 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 Andrew Galbraith; Additional reporting by Jindong Zhang; Editing by Ana Nicolaci da Costa) Our Standards: The Thomson Reuters Trust Principles.