USD/CNH has also stabilized around 7.26-7.27 ahead of FOMC, DBS FX & credit strategist Chang Wei Liang notes.

USD/CNH to break below 7.26-7.27

“PBOC has maintained its stable RMB policy with CNY fixings being kept near 7.13, even after it eased monetary policy in the last week. The 1Y MLF rate was cut by 20bps last Thursday to 2.30%, following a 10bps LPR cut.”

“China PMI releases tomorrow may give little respite for the RMB as activity looks to stay sluggish. A more durable downshift in USD/CNH will depend on a broad USD reversal, with Fed guidance this week being front and centre.”