USD/CNY, USD/INR in focus as Asia markets slide on Middle East tensions

Asian financial markets are under pressure as escalating Middle East tensions following a Saudi attack warning drive risk-off sentiment across the region. The PBOC set the USD/CNY reference rate at 6.7904, while traders report active intervention to support the Indian rupee against the US dollar. China's July export data provided a bright spot, beating forecasts as AI-related demand helped sustain the export engine despite fresh US tariffs, supporting the trade balance narrative. Asian equities declined broadly, with Korean markets and Japan's Nikkei weighed down by geopolitical jitters and weakness in AI-related names. In commodities, Chinese investors poured $1.2 billion into gold ETFs in the longest buying streak since March, signaling strong safe-haven demand. The ECB held rates steady, maintaining its current monetary policy stance. Crypto markets face uncertainty as the US Senate pushed the CLARITY Act vote to September. Traders should monitor geopolitical developments closely, as further Middle East escalation could strengthen safe-haven currencies like JPY and CHF while pressuring risk-sensitive Asian currencies and commodity-linked pairs.