USD/CNH and USD/CNY have risen again overnight. The background to the weaker yuan is that the People's Bank of China has loosened up on dampening USD/CNY, we had a warning of this on Monday:
And since then the Bank have indeed allowed the CNY to drift lower:
I'm wary that we are seeing a significant change on yuan policy from the PBoC. I don't think they'll just let it go. Indeed the Governor spoke mid-week and ruled out allowing 'overshooting'.
The PBoC have been hampered from lowering interest rates and stimulating the economy this way by the weak yuan.
