USD/CNH has broken the key level at 7 for the first time in over a decade as the trade conflict between the US and China escalates again, after Trump’s latest round of tariff hikes. At the time of writing, USD/CNH is trading at 7.075.

An unexpected tariff hike announcement on Thursday after the in-person talks held in Shanghai saw investors rush towards safe haven assets, weakening major global currencies as a result. This has also caused the major support level at 7 to fall away in the case of USD/CNH.

Panic selling has generated a sudden fall in the Chinese yuan, making it decline to an 11-month low. How will the PBOC step in and stop the yuan from weakening further?