1 Month Above 1340 On Negative Yuan Spillover

1 month USD/KRW finished NY trade at 1342.7 on Friday, a won loss of nearly 0.70%. Friday highs in the pair came in at around 1345, amid broad USD gains. Early Jan highs in the 1 month NDF came in at 1348.1, which could be an upside target if USD gains persist. The 20-day EMA sits back near 1328.50. Note onshore spot finished up at 1338.45 on Friday.

• Sharp yuan losses spilled over negatively to the won on Friday. This more than offset a more resilient yen backdrop and lower core yields.
• In the equity space we saw modest outperformance from the SOX and MSCI IT indices in Friday trade, but this didn't aid won sentiment much. To recap, the onshore Kospi lost 0.23% in Friday trade, while offshore investors added $458.4mn to local shares.
• The other focus point for the won is likely to be any step up in rhetoric around FX weakness given that we are close to YTD lows for the 1 month NDF, although for spot won we haven't sustained breaches of the 1340 level in recent months.
• Locally, the data calendar is quiet today, with consumer confidence for March out early tomorrow.
• The authorities stated at the end of last week that a pilot test for extending onshore trading hours for the won were successful.