China's central bank has lowered CNY-CNH spread by 131pps to 6.3851, to a two-week low. There were strong USD longs in onshore market as the lower fixing rate helps the corporates which need to hedge/unwind short USD positions.

However, in offshore market, USD-CNH is pressurized in Morning session because of softness of USD overnight and carry costs' rise. CNY-CNH spread narrowed to 350 pips, as a result, from 480 pip on previous trading day.

"While PBoC should continue to monitor the key level of 6.40 for USD-CNY and 6.45 for USD-CNH, the intervention appears to have become less intensive compared with the previous two months", says Commerzbank in a research note.