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Free Access1 Month USD/KRW At Fresh Multi-Month Lows
1 month USD/KRW finished the NY session close to 1280, which is right on fresh lows going back to late June. The won outperformed the slightly firmer tone to USD post the Asia close. The near term bias appears to remain to fade upticks in USD/KRW. Note spot ended yesterday's session close to 1286.
- The offshore equity lead is a positive one for the Kospi today, with major tech indices recording their first gains since Tuesday last week. Late in the US session though, chip maker Micron delivered a poor update, citing a softer sales outlook. This may temper sentiment in the space at the margins.
- To recap, the Kospi edged down by 0.19% yesterday, while offshore investors sold -$52.2mn local shares, bringing week to date outflows to -$221.5mn.
- The won continues to trade resiliently to the equity backdrop though, see the chart below. In terms of drivers of this wedge, one possibility is increased hedging flows from the National Pension Service (which is temporarily raising its hedging ratio on foreign assets to 10%). The won also benefited from the recent sharp drop in USD/JPY, although the won outperformed yen moves yesterday.
- Earlier the November PPI eased to 6.3% y/y, from 7.3% prior. The BoK will also release its H2 financial stability report at 11am local time.
Fig 1: USD/KRW 1 Month (Inverted) Versus Kospi Wedge Remains
Source: MNI - Market News/Bloomberg
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.