SHANGHAI, Aug 18 (Reuters) - China"s yuan inched higher against the dollar on Wednesday, unfazed by a firmer greenback and rising risk aversion in global markets, as investors continued to wait on policy signals from central banks before making bets on the local currency. Traders said market attention is on the minutes from the Federal Reserve"s July meeting, due later in the session, for clues on the possible timing of tapering. Any specific comments or plans could bring huge volatility to the dollar and major currencies. Prior to market opening, the People"s Bank of China (PBOC) set the midpoint rate at a near three-week low of 6.4915 per dollar, 150 pips or 0.23% weaker than the previous fix of 6.4765. In the spot market, onshore yuan opened at 6.4850 per dollar and was changing hands at 6.4821 at midday, 37 pips firmer than the previous late session close. The yuan remained stuck in a tight range of about 40 pips on Wednesday morning, and volume dipped to $12.3 billion, below a normal half-day"s volume of around $15 billion. The yuan has been stable in recent weeks, but its relatively smaller movements against a firmer dollar than other emerging market currencies have sent its basket index, a gauge that measures the yuan"s value against its major trading partners, to a four-week high of 98.76, up 4.14% year-to-date. "However, the broad RMB strength could pose a headwind on China exports, which have been already weakening over past few months due to the Delta variant spread," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. "In our view, the PBOC was doing an excellent job to anchor RMB expectation, and market participants refrained from pushing the RMB beyond its narrow range before PBOC"s green light." Cheung added that the Fed"s tapering announcement could prompt the PBOC to tweak its FX policy and he expected the yuan to weaken past 6.5 per dollar this year. By midday, the global dollar index stood at 93.082, while the offshore yuan was trading at 6.4844 per dollar. The yuan market at 0408 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4915 6.4765 -0.23% Spot yuan 6.4821 6.4858 0.06% Divergence from -0.14% midpoint* Spot change YTD 0.71% Spot change since 2005 27.68% revaluation Key indexes: Item Current Previous Change Thomson 98.77 98.7 0.1 Reuters/HKEX CNH index Dollar index 93.082 93.137 -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 6.4844 -0.04% * Offshore 6.6647 -2.60% 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 Richard Pullin) Our Standards: The Thomson Reuters Trust Principles.