We continued to watch the fix vs. expectations to gauge policymakers’ comfort level with the recent pace of depreciation. But such action probably can only slow the pace of RMB depreciation and not reverse the RMB weakening trend. 

7.28-7.30 probably seen as the next line in the sand for now but more crucially it is the pace of depreciation, excessive volatility, and herd behaviour (one-side move) the PBoC is likely targeting rather than any specific level. More importantly, markets are looking for fiscal stimulus measures to support domestic demand.