DOLLAR-WON: Rate touched fresh highs of 1,173.90.....>

DOLLAR-WON: Rate touched fresh highs of 1,173.90 in early Asia-Pac trade, the

best levels since early 2017 as the recent bout of weakness for the KRW shows no

signs of reversing. At the close, KRW managed to claw back much of the day's

losses, but momentum and trend indicators continue to point higher. Regional

weakness in equities (particularly Japan) worked against the currency, with

reports that North Korea are developing further their missile weapons programme

hurting sentiment.

-The continued volatility in spot USD/KRW markets has worked in favour of

options activity, with close to $3bln in options notional changing hands

Tuesday. Call bias was apparent from the off, with $5 in call notional trading

for every $2 in puts. Call strikes north of the recent cycle highs remain

popular, with particular interest in trades rolling off at 1,215, 1,200, and

1,175-80 so far today.

-Highly active USD/KRW options come alongside the continued recovery in vol

markets, with the short-end being the main beneficiary since printing lows in

mid-April.