MUFG’s Asia FX Weekly highlights that China’s July activity indicators, following weak Q2 GDP, will be central for the Chinese Yuan and regional FX.

OCBC’s Sim Moh Siong and Christopher Wong note USD/SGD is consolidating around 1.28 as softer United States (US) Producer Price Index (PPI) trims Federal Reserve (Fed) hike expectations but fails to trigger fresh US Dollar (USD) selling.

Societe Generale analysts note USD/KRW has corrected after losing its 200-day moving average near 1478 and is now testing an ascending trend line from 2023 around 1407.

TradingKey - Chicago Fed President Austan Goolsbee said he was encouraged by the recent cooling in inflation, but continued similar improvements will be needed over the coming months to confirm that i

United Overseas Bank (UOB) analysts Quek Ser Leang and Lee Sue Ann note that USD/CNH remains confined to a tight intraday range, with momentum indicators still flat and the pair expected to trade between 6.7400 and 6.7500.

MUFG analysts focus on several ASEAN indicators for regional currencies. They flag Singapore’s July non-oil domestic exports after June’s strong 20.7% year-on-year rise, and expect Malaysia’s CPI to stay contained at 1.9% year-on-year.

TD Securities’ Robert Both expects Canadian headline CPI to rise to 2.9% year-on-year in July, driven by higher gasoline and food prices, while ex. food/energy components stay muted.

ING’s Lynn Song expects Bank Indonesia to keep its benchmark rate unchanged at 5.75% this week, prioritizing Rupiah stability while avoiding an immediate hike. The report highlights BI’s growing reliance on non-rate tools such as SRBI yields and FX intervention.

Nordea strategists see the Norwegian Krone (NOK) broadly stable over the next six months after July’s EUR/NOK decline, driven by higher Oil prices and Norges Bank’s increased NOK purchases.

ING’s Lynn Song expects China’s July data to show continued sluggish momentum, with only a modest rebound and weak Retail Sales at 1.7% year-on-year. Fixed Asset Investment is forecast to contract further, while Industrial Production remains relatively firm.

Nordea analysts Ole Håkon Eek-Nielsen and Jan von Gerich argue that the Federal Reserve is likely to deliver three more rate hikes over coming quarters to bring inflation back to target.

TD Securities’ Julie Ioffe expects UK headline CPI to rise to 2.9% year-on-year in July, largely due to the Ofgem energy price cap adjustment. Services inflation is forecast to ease to 3.4%, while core goods rise to 1.0%, keeping core CPI at 2.6%.

ING highlights that market consensus sees Japan’s preliminary Q2 Gross Domestic Product (GDP) holding at 0.5% quarter-on-quarter, with Private Consumption remaining the main growth driver.

Commerzbank’s Norman Liebke highlights that Oil and European natural gas are reacting differently to Middle East supply risks, with Brent supported by rerouted flows while gas remains constrained by lost LNG from Qatar and US cargoes diverted to Asia.

Royal Bank of Canada (RBC) economist Claire Fan highlights that Canadian growth rebounded strongly in Q2, supported by resilient domestic demand and improving net trade. She notes that U.S.

ING’s Chris Turner notes that despite sharp moves in Japanese money markets, the Japanese Yen is not finding lasting support. Markets now price a high probability of a Bank of Japan hike in September, narrowing US–Japan swap differentials, yet USD/JPY remains elevated as carry trades persist.

Rabobank strategist Elwin de Groot observes that stronger-than-expected UK GDP has provided fresh ammunition to Bank of England (BoE) hawks, even as the Bank remains reluctant to tighten further. Growth was broad-based, with investment and GDP per capita both rising.

Nordea’s Ole Håkon Eek-Nielsen and Jan von Gerich expect the European Central Bank (ECB) to deliver three additional 25bp rate hikes, taking the deposit rate to 3%.

Societe Generale notes Norway’s central bank kept its policy rate unchanged at 4.25% and softened its hawkish tone. The bank still anticipates one further rate increase, but removed explicit guidance for a near-term hike.

TradingKey - The latest US July retail sales data came in significantly weaker than market expectations. US retail sales fell 0.6% month-on-month in July, compared with a 0.2% increase in June, while

Retail Sales in the United States decreased to $763.6 billion in July, the US Census Bureau reported on Friday. This print reversed the 0.2% expansion recorded in the previous month and came in below market expectations (+0.1%). On a yearly basis, Retail Sales were up 5.0% in this period.

TD Securities’ Oscar Munoz argues that Chair Kevin Warsh’s communication strategy has undermined market confidence in the Federal Reserve’s inflation-fighting resolve.

Rabobank's Senior FX Strategist Jane Foley highlights Switzerland’s stronger-than-expected Q2 Gross Domestic Product (GDP) and resilient economy, yet notes EUR/CHF remains in a gentle uptrend since late May.

Commerzbank’s Antje Praefcke explains that Norges Bank kept its policy rate at 4.25% and still signals that further tightening may be necessary as inflation remains above target. However, upcoming data, especially August inflation, could prompt the bank to drop its year-end hike signal.

TD Securities strategists forecast Canadian Manufacturing Sales to fall 0.4% month-on-month in June, weaker than the market’s -0.1% call, mainly due to lower petroleum prices.

The University of Michigan (UoM) will release the preliminary estimate of August’s Consumer Sentiment Index on Friday.

Rabobank strategist Elwin de Groot reports that the Reserve Bank of Australia (RBA) left rates unchanged, with markets initially reading the statement as dovish.

TD Securities’ Gennadiy Goldberg and Molly Brooks analyze the Federal Reserve’s decision to halt Reserve Management Purchases (RMP) after tapering from $40bn to $10bn per month.

MUFG’s Lee Hardman reports the British Pound (GBP) is the best performing major currency in August, with GBP/USD back above 1.3500. The United Kingdom (UK) economy is proving resilient to the energy price shock linked to the US-Iran conflict, with Q2 GDP up 0.4% after 0.6% in Q1.

Commerzbank’s Volkmar Baur notes that Japanese government support for an imminent Bank of Japan rate hike has reinforced market expectations rather than surprised them. Probabilities now favor a hike as early as September, with October fully priced and another move in December possible.