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1 Month USD/KRW Close To Recent Highs, Diverging Somewhat From Still Solid Equity Flows


1 month USD/KRW finished close to recent highs in NY trade, just under the 1264 level. We saw roughly a 10 won move through NY trade from lows around the 1254 level. The won faltered amid the USD turnaround/shift higher in US yields. Note onshore spot ended yesterday at 1260.30.

  • US equity sentiment faltered in later trade, although tech related indices didn't fall too much, the MSCI IT down 0.34% for Thursday's session, while the SOX actually rose +0.13%.
  • To recap, the Kospi was down slightly in trade yesterday, but the Kosdaq still rose 0.59%, while offshore investors added $257.1mn to local shares.
  • The chart below overlays the rolling 1 month sum of offshore net equity flows, versus 1 month changes in KRW/USD (1 month NDF). Flows are just off their recent highs, although have remained positive for the past week, while the 1 month NDF is off around 2% in won terms over the past month, creating some divergence between the two series.
  • The data calendar is empty today. The Finance Minister will hold a meeting on economic regulation at 10:30am local time. The other focus point could be North Korea, given recent military exercises/parades and a potentially new ICBM. Still, such developments haven't impacted South Korea asset sentiment so far.

Fig 1: South Korea Offshore Rolling Net Equity Flows (USDmn) Versus KRW/USD 1 Month Change

Source: MNI - Market News/Bloomberg

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