SHANGHAI, July 20 (Reuters) - China"s yuan rebounded from a 10-day low against the dollar, as the local currency got a helping hand from Tuesday"s steady fixing of the benchmark lending rate and corporate demand. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.4855 per dollar, 155 pips or 0.24% weaker than the previous fix of 6.4700, the weakest since May 6. The spot market bounced from a 10-day low of 6.4915 per dollar hit on Monday and traded at 6.4870 by midday, 35 pips firmer than the previous late session close. Traders said robust corporate demand for the yuan as it weakened towards the psychologically important 6.5 per dollar level offset broad safe-haven driven strength in the U.S. currency. As the Delta variant of the coronavirus wreaks havoc across many countries, Carie Li, economist at OCBC Wing Hang bank, said risk aversion could further lift the dollar in the short term. "Subsequently, if data supports normalisation in U.S. Federal Reserve policy, the dollar index may remain strong," Li said in a note. "If the dollar index rises past 93, or even to the year-to-date"s high of 93.5, we will see if the yuan can hold the 6.50 mark against the U.S. dollar." The slight strength in the yuan was also underpinned by China"s decision to keep its benchmark lending rate for corporate and household loans unchanged this month, despite growing expectations for a cut after a surprise lowering of bank reserve requirements. The yuan"s value against its major trading partners, as measured by the China Foreign Exchange Trade System (CFETS) index, surged to 98.46 on Tuesday, the highest since March 2016, according to Reuters" calculations based on official data. Analysts attributed the firmer CFETS index to relatively smaller declines in the yuan than in its peers. Many investors take 98 as the ceiling for the index and its persistent strength could prompt some central bank action to rein in the yuan as an appreciating index disadvantages China"s exporters, said a trader at a Chinese bank. By midday, the global dollar index stood at 92.869, while the offshore yuan was trading at 6.4926 per dollar. The yuan market at 0401 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4855 6.47 -0.24% Spot yuan 6.487 6.4905 0.05% Divergence from 0.02% midpoint* Spot change YTD 0.64% Spot change since 2005 27.59% revaluation Key indexes: Item Current Previous Change Thomson 98.35 98.35 0.0 Reuters/HKEX CNH index Dollar index 92.869 92.877 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 6.4926 -0.09% * Offshore 6.661 -2.63% 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 Shri Navaratnam)