Chinese Yuan has slowly dropped against US dollar over last month. November's PBoC FX reserve data indicates active intervention to smooth out CNY depreciation pressures.

This depreciation bias is expected to persist in near term. Latest economic data, including PMI surveys, are somewhat disappointing, while the equity markets look vulnerable.

"This suggests that policymakers may need to ease monetary policy further to support growth. Looser monetary policy, alongside recent changes to the CNY fixing methodology, also leave the CNY more vulnerable to Fed tightening than in the past", says Lloyds Bank in a research note. 

The IMF announcement this month that the CNY would be included in the SDR basket next year has sparked rumours of another imminent widening in the permissible trading band of the CNY versus the USD.