In order to check the appreciation in the yuan against the US dollar, the Chinese authorities are seen implementing more drastic measures after the recent multi-pronged attempts, Reuters reports, citing China’s media outlet.

Key takeaways

“Chinese FX authorities may therefore intervene more aggressively, and directly, in the yuan market.”

“If USD/CNY shorts continue to ignore the shrinking gap between Treasury yields and Chinese sovereign bonds, the PBOC may also lower rates again, which would serve Beijing's interests in propping up the flagging economy.”

Meanwhile, USD/CNY is trading flatlined around 6.3721, as of writing, having recovered sharply from over three-year lows of 6.3384 reached last week.