1 Month USD/KRW Near YTD Highs, Official Rhetoric On FX Steps Up

1 month USD/KRW got above 1342 late in NY trade on Wednesday, very close to earlier 2023 highs. We closed at 1341.20, a won loss of 0.35%, down for the fifth straight session. Won was weighed by broader USD gains, higher US yields and equity weakness. Onshore spot ended yesterday at 1336.80.

• Yesterday Finance Minister Choo stated the authorities are watching FX markets closely and will take adequate steps to stabilize markets if needed (see this link for more details). Onshore spot tried to move above 1340 in early trade yesterday but couldn't sustain these moves. This is likely to be an early focus point today, given the 1 month NDF closed above this level in NY on Wednesday.
• On the data front we have already had July trade prices print. Import prices rose 0.4% m/m, following two sharp drops in May and June. We are still down -13.5% y/y. Export prices rose 0.1% m/m, but are off -12.8% y/y. The data calendar is quiet until next week when the first 20-days of trade data for August prints on Monday.
• The equity lead for the Kospi today remains negative, with the SOX off 2.08% in Wednesday US trade, the MSCI IT down 0.84%. To recap, the Kospi fell -1.76%, while offshore investors sold -$124.5mn of local shares. Week to date outflows are now -$311.9mn.