Despite the short-term stability in the Yuan, we think that the fundamentals still point to Yuan weakness, and we re-iterate our Q3 USD/CNH target of 7.50. We think the PBoC is slowing (but not halting) Yuan's weakness ahead of key levels (such as 7.30). Fed-PBoC divergence, broad Dollar weakness and a weak export outlook point to higher USD/CNH. 

We suspect CNH could trade in a narrow 7.20-7.30 range for the remainder of July. Thereafter, we think the PBoC will ‘permit’ gradual USD strength vs the yuan. While the PBoC suppresses volatility, we think USD/KRW will be more reactive to China sentiment and US data. We maintain a bearish Won bias within a 1,250-1,350 range in USD/KRW.