PBOC reportedly will not allow the Chinese yuan to weaken past 7.00 per dollar

Reuters reports

The report says that the PBOC will intervene and use monetary policy tools to ensure that the yuan does not weaken past 7.00 per dollar in the immediate term, citing three people familiar with the matter.

For some context, the 7.00 level in USD/CNY has long been seen as a key line in the sand since last year; which is why it is gathering a lot of attention as the yuan continues to weaken over the past week on escalating trade tensions.

Right now, the onshore yuan has already weakened past 6.90 per dollar and as mentioned earlier this week, it could prompt intervention from Chinese authorities. The reason for that is because China doesn't want to see capital outflows as a result of a falling currency, especially in a time of uncertainty such as this.