USD/CNH Holds Above 7.2000, July Trade Data In Focus

USD/CNH was supported on dips post the Asia close, with downside limited to the low 7.1900 region. On the topside though we couldn't get much beyond the 7.2050 level. We currently track just above 7.2000, with CNH having lost 0.19% for Monday's session. USD/CNY remains sub 7.2000, closing Monday at 7.1931, with Bloomberg reporting that state owned banks were USD sellers on moves towards 7.2000 late in Monday's session. The CNY NEER (J.P. Morgan Index) was close to flat for Monday's session, last 121.67.

• Late yesterday we had July FX reserves out, they printed close to expectations at $3204.2bn (prior read was $3193bn).
• Today the focus is on July trade figures, the market looks for further export weakness, -13.2% y/y is the projection (prior was -12.4%), while imports are forecast to improve modestly in y/y terms to -5.6% (prior -6.8%). The trade surplus is projected little changed at $70bn.
• The other focus point has been on reported lower levels of foreign direct investment in China from the Q2 BoP data (see this link for more details).
• In the equity space, to recap the CSI 300 fell 0.76% for Monday's session. The Golden index Dragon index also fell further, down 0.81%, after Friday's -1.04% fall.