SHANGHAI, Sept 30 (Reuters) - China"s yuan rebounded on Thursday from a one-month low against a firmer dollar hit a day earlier, as higher demand for the local currency outperformed disappointing economic data. For the month, the yuan looked set for a marginal loss. Currency traders said the broad strength in the greenback, which was underpinned by higher expectations for Federal Reserve tapering from November and a possible interest rate hike in the United States in late 2022, prompted profit-taking and led some investors to rush to convert their dollars into the Chinese unit. Banks also shored up their yuan positions ahead of an upcoming long holiday and various administrative requirements on the last trading day of the quarter. Chinese markets will be closed for the week-long National Day holiday starting on Friday. Prior to the market opening, the People"s Bank of China (PBOC) set the midpoint rate at 6.4854 per dollar, 192 pips or 0.3% weaker than the previous fix of 6.4662, the weakest since Aug. 27. In the spot market, the onshore yuan rebounded from a one-month low of 6.48 per dollar hit on Wednesday. By midday, the spot price was changing hands at 6.4680, 35 pips firmer than the previous late session close. If the yuan finishes the late night session at the midday level, it would have dipped 0.1% against the dollar for the month. But signs that the economic recovery was losing momentum remained a market concern, said a trader at a foreign bank, adding the recent power crunch across the country could add pressure on the broader economy. Official data showed that China"s factory activity unexpectedly shrank in September due to wider curbs on electricity use and elevated input prices, though services returned to expansion as COVID-19 outbreaks receded, offering some relief to the world"s second-biggest economy. "The disappointing manufacturing PMI suggested that the downside risk for China economy has been increasing, and the downgrade on China growth outlook could weigh on the RMB exchange rate subsequently," said Ken Cheung, chief Asian FX strategist at Mizuho Bank. Some market analysts and traders believe stimulus is still needed to arrest the slowdown. "The next reserve requirement ratio (RRR) cut may be around the corner and a 50 basis points (bps) cut is widely expected," analysts at Maybank said in a note. By midday, the global dollar index stood at 94.285, while the offshore yuan was trading at 6.4726 per dollar. The yuan market at 0409 GMT: ONSHORE SPOT: Item Current Previous Change PBOC midpoint 6.4854 6.4662 -0.30% Spot yuan 6.468 6.4715 0.05% Divergence from -0.27% midpoint* Spot change YTD 0.93% Spot change since 2005 27.96% revaluation Key indexes: Item Current Previous Change Thomson 99.73 99.47 0.3 Reuters/HKEX CNH index Dollar index 94.285 94.344 -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 6.4726 -0.07% * Offshore 6.6508 -2.49% 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 the Shanghai Newsroom; Editing by Kim Coghill)