SHANGHAI, May 13 (Reuters) - The yuan strengthened on Wednesday, flirting with fresh three-year highs despite an overnight bounce for the U.S. dollar, as traders anticipated deals during this week's meeting between U.S. President Donald Trump and his Chinese counterpart, Xi Jinping.

The leaders will hold their first face-to-face talks in more than six months as they try to stabilize ties strained by trade, the U.S.-Israeli war on Iran and other areas of disagreement.

"Attention on U.S.-Iran is set to give way to Trump's visit to China," DBS analyst Chang Wei Liang said.

With a slew of deals for U.S. companies expected, "the Trump-Xi summit signals an intent to ratchet lower trade tensions," which should support the yuan.

The Chinese currency CNY=CFXS changed hands around 6.7919 per dollar in late morning trading, roughly 0.05% firmer than Tuesday's close.

It strengthened even after the dollar rebounded 0.4% overnight amid fears that persistently elevated oil prices will likely constrain the U.S. Federal Reserve's easing cycle.

DBS said that yuan's strength - it firmed this week beyond 6.80 per dollar for the first time since February 2023 - reflected China's economic resilience.

"China's domestic inflation dynamics remain relatively insulated from energy price volatility, thanks to its more diversified energy mix," DBS said in a note.

"Optimism over a potential trade deal during the Trump-Xi meeting this week also supports the RMB strength."

Trump is scheduled to arrive in Beijing on Wednesday, ahead of talks set to take place on Thursday and Friday.

More than a dozen CEOs and top executives from companies like Tesla TSLA.O, BlackRock BLK.N, Illumina ILMN.O, Mastercard MA.N and Visa V.N are expected to accompany Trump on his visit.

Trump and the CEOs "can go home saying that they have boosted American access to business opportunities in China," wrote Arthur Kroeber, head of research at Dragonomics.

"Xi can tell his domestic audience that he has stared down U.S. trade and technology threats, dealt with Trump as an equal and stabilized China's most important economic and political relationship."