1 Month USD/KRW Above 1350 As Equity Weakness Continues

1 month USD/KRW closed in NY trade on Tuesday near session highs, just above the 1352 level. This was a won loss of just over 1%. The pair broke above its recent trading range to post fresh YTD highs. November 2022 highs around 1362 may be the next upside target. Spot USD/KRW closed yesterday at 1348.7, also at fresh YTD highs.

• The won was weighed by broader USD gains (BBDXY +0.32%), while equity sentiment was noticeably weaker. The SOX fell 1.77%, while the MSCI IT index lost 1.79%, modestly underperforming broader US market trends. The surge in US real yields is weighing on equity sentiment.
• This comes after the Kospi fell 1.31% yesterday, while offshore investors sold $97.1mn of local shares.
• On the data front we have already had the October manufacturing and service sentiment readings print. Manufacturing sentiment fell to 67 (from 69), but services improved to 77 from 76. More details to follow.
• The BOK noted in its financial stability report yesterday that household debt to GDP rose in Q2, for the first time in four quarters. The central bank recommended the authorities implement macro prudential rules to slow the rise. Overall financial system risks were seen as well contained though.