The PBOC moved to weaken the yuan this week amid some worrying concerns surrounding China's economy, which has seen many houses call for softer growth for the remainder of the year. Among those names are Goldman Sachs, ING, Standard Chartered, and Nomura to name a few.

Today, the central bank sought to fix the yuan at its lowest since September 2020 but perhaps more importantly, they are seemingly comfortable with the pricing of the yuan falling past 6.80 against the dollar. That's a big level that markets have been respecting based on the communique from China in the past few months - after of course having weakened the yuan from April to May:

USDCNY W1 19-08

If China is comfortable with letting the yuan decline by another leg, that will in turn be a catalyst for another leg higher in the dollar as well. Watch this space.