Considering recent actions, I would argue that China did think about drawing a hard line in USD/CNY somewhere close to 7.00 but prevailing market fundamentals have made it tough to really pin down price action. The dollar is running a rampage amid a more hawkish Fed and there are still major concerns surrounding China's economic outlook, which isn't quite helping the currency.

The latest fixings from the PBOC are also angling towards a further weakening in the currency, even if they did not officially go past the 7.00 mark as of yet. The USD/CNY fix today was seen at 6.9920.

What will be interesting is that now it looks like we may see the yuan fall further to test the lows (highs for USD/CNY) from September 2019 and May 2020 close around the region of 7.15 to 7.18. A break above that will see the yuan fall to its lowest ever since China chose to abandon its old peg against the dollar and revalue the currency.

As much as markets might be focused on other major events and moves this week, the continued depreciation in the yuan is also a notable development that warrants attention. In turn, this just provides yet another tailwind for the dollar in the grand scheme of things.