Data Strong But Won Fails To Find Footing

A solid set of exports data from South Korea has helped support risk assets in the country, but the won is still weaker against USD.

• Exports rose 11.4% Y/Y in December (est. 9.8%). The increase was attributed to strong growth in semiconductors, mobile handsets and other electronics. It is the first time for overall exports to record consecutive double-digit monthly growth since 2017.
• Other data from South Korea saw manufacturing PMI rose to 53.2 in January from 52.9. "The overall improvement at South Korean manufacturers was driven by solid growth in output - the strongest seen since February 2011, and the fifth rise in succession. Firms also reported that new business inflows from domestic and international clients continued to increase in January, albeit at a slower pace than December" said Usamah Bhatti, Economist at IHS Markit.
• Moderating any optimism is the announcement of an extension to social distancing measures after a pickup in cases last week. The government announced the alert level for the greater Seoul area, where half of the country's population live, will be maintained at the second-highest level of 2.5 for the additional two-week period.
• USD/KRW last up 1.35 a 1119.80. The pair rose through the session on Friday as the greenback went bid, the rate hit session highs of 1121.45 before the close on Friday. At these levels we are the highest since early November.