Economic momentum was soft to start the year, and it is possible we could see further monetary easing in the next month, which adds to the short-term depreciation bias.

In subsequent months, an expected recovery of sentiment or fundamentals, as well as the start of global rate cuts would be potential catalysts for CNY appreciation.

Nobody expects a quick turnaround in the Chinese economy, but we expect 7.3000 to continue proving a line in the sand for USD/CNY and the broader Dollar trend to carry it lower in the second half of the year.