1 Month Holding Above 1380, May PMI Out Today

1 month USD/KRW finished up just under 1381 in NY trade on Friday. This was off earlier highs around 1385, but still a won loss of nearly 0.50% for the session. In terms of levels, Friday highs came close to earlier May highs. On the downside the 20-day EMA is back near 1365.3. Also note onshore spot finished up at 1385 on Friday.

• The won didn't get any lasting benefit from softer USD trends seen against some of the majors see on Friday as US yields pulled lower. USD/JPY and USD/CNH dips were generally supported, so that likely provided some offset.
• Weekend data on May trade figures showed weaker than expected trade figures. Export growth was +11.7%y/y versus +15.3% forecast, imports were -2.0% y/y, against a +2.7% forecast. The trade surplus was near $5bn, above expectations. The slightly weaker export backdrop owed to softness outside of the tech space.
• Coming up this morning we have the May PMI for South Korea, while CPI prints tomorrow.
• With USD/KRW levels back close to earlier April highs around 1400, FX markets may come under renewed focus from the authorities.
• It was reported on Friday that the central bank and the National Pension Service may expand the size of their FX swap deal (currently at $35bn). The NPS also announced it will increase its offshore equity allocation to 35.9% by the end of 2025 (currently it stands at 33.3%, see this link). Such offshore FX demand weighs on the won, but the swap facility is designed to mitigate that.