SHANGHAI, Aug 16 (Reuters) - China"s yuan briefly touched a 10-day high against the dollar on Monday but pared all its gains as fresh signs of a slowdown in the world"s second-largest economy hit market sentiment. Official data showed China"s factory output and retail sales growth both slowed in July as export growth cooled and new COVID-19 outbreaks disrupted business. Prior to the market opening, the People"s Bank of China (PBOC) set the midpoint rate at a 10-day high of 6.4717 per dollar, 82 pips or 0.13% firmer than the previous fix of 6.4799. In the spot market, onshore yuan opened at 6.4733 per dollar, the highest level since Aug. 6, and was changing hands at 6.4775 at midday, 8 pips weaker than the previous late session close. The retreat in the spot yuan was driven by the disappointing data that fueled concern about growth momentum in China, traders said, as fundamentals remained the key factor deciding the yuan"s value over mid- to long-term. Terence Wu, FX strategist at OCBC Bank, said the weaker activity indicators and widening outbreaks of Delta variant have reinforced easing PBOC"s easing measures. "Thus far, negatives in Asian currencies have been largely domestically driven. Global cues are still relatively benign, especially in the context of falling real yields in the DM economies. Should there be a secular move higher in real yields later in the year, EM Asian currencies could come under more pressure," Wu said in a note. Many market economists and analysts believed more easing measures were needed to arrest the economic slowdown, but powerful tools including rate cut should be unlikely. "We expect fiscal policies to be more proactive at pushing belated infrastructure projects," said Iris Pang, Greater China economist at ING. "There is no need for policy interest rate cuts as the RRR cut has pushed down market lending rates. Another RRR cut should happen in 4Q21 if there are more incidents and dramatic policy actions." Earlier in the session, China"s central bank injected billions of yuan through medium-term loans into the financial system, which many market participants interpreted as an effort to prop up the economy, although the cost of such borrowing was left unchanged. In global markets, the dollar held near a one-week low versus major peers, after slumping the most in almost seven weeks on Friday as diving U.S. consumer confidence hurt bets for an early tightening of Federal Reserve policy. The global dollar index stood at 92.545 at midday, while the offshore yuan was trading at 6.4788 per dollar. The yuan market at 0404 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4717 6.4799 0.13% Spot yuan 6.4775 6.4767 -0.01% Divergence from 0.09% midpoint* Spot change YTD 0.78% Spot change since 2005 27.77% revaluation Key indexes: Item Current Previous Change Thomson 98.6 98.78 -0.2 Reuters/HKEX CNH index Dollar index 92.545 92.535 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 6.4788 -0.02% * Offshore 6.6594 -2.82% 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 Sam Holmes) Our Standards: The Thomson Reuters Trust Principles.