Hi
@Green Eyes and welcome to the forum.
Unfortunately Blood Glucose and weight don't always go together.
While an HbA1C of 6.9% isn't good, it isn't that bad either since it isn't far into the diabetic range. Apart from walking less, has anything else changed recently such as new medication, illness, injury, stress or severe lack of sleep? All of those things can affect our Blood Glucose without any change in what we eat.
You aren't eating many calories (based upon your height). What is your BMI?
It is thought that slim (or TOFI Thin Outside Fat Inside) Type 2 diabetics have a harder time reducing their glucose levels than the more usual overweight ones.
Low calorie diets especially when maintained for a long time reduce the body's Resting Metabolic Rate - making it burn less calories when sitting. This makes it much easier to regain weight even when eating fewer calories than a normal healthy person would do. Unfortunately the calories burned while doing not much form the bulk of all the calories that a normal person will use during the day - this is why they say it isn't possible to out run a poor diet.
Of course it is possible to reduce both carbs and even calories even more, but personally I wouldn't reduce calories since that may be the cause of your current situation in the first place.
Again on a personal note, we aren't all the same in our reaction to carbs and so for me those baby carrots spike my BG even though many/most diabetes would have no problem with them. Have you tested different carby veg to see if any affect you much more than others. That is what i did when I was first diagnosed, before which I used to eat an apple and several carrots every day (as well as a more obvious banana). Well testing before eating and then 2hrs after first bite showed a rise of more than 2.0 mmol - so I don't eat those any more.
You appear to be saying that your BG is high in a morning I presume that is before your coffee. This can only be due to either eating lots of slow acting carbs in the evening) perhaps with lots of fat or with alcohol), or the Dawn Phenomenon. That is where our cave dweller's liver decides to help us by providing the energy for us to hunt/gather our breakfast by dumping its own produced glucose into our blood stream. It can take several years to get it to reduce this to more acceptable levels.
Finally, it is possible for the Insulin creating Beta cells of the pancreas to stop working as well, so reducing the amount of insulin produced and thus causing BG to rise even if insulin resistance is not changing.
Whatever things you decide to try I wish you success with them.
Ian