Domestic Data Amplifies Pressure To Won

Spot USD/KRW trades +8.70 figs at KRW1,307.95 as unfavourable domestic data have exerted pressure to the Korean won & the BBDXY index holds above Friday's Asia close. From a technical perspective, the next key layer of resistance is at KRW1,326.65, which capped gains on Jul 15. On the flip side, bears look for a dip through the 50-DMA/Jun 27 low at KRW1,289.00/1,280.65.

• USD/KRW 1-month NDF last seen at KRW1,307.30, up ~4 figs on the day. On the topside, the next technical hurdle is provided by Jul 15 cycle high of KRW1,329.02. Meanwhile, bears look for a fall through the 50-DMA at KRW1,287.77 towards Jun 28 low of KRW1,279.75.
• South Korea reported a trade deficit of $4.670bn for the month of July (BBG est. was $4.368bn), which was the second-largest shortfall in a data series beginning in 2000. Still, exports gained 9.4% Y/Y (BBG est. was +10.0%), suggesting that overseas demand remains robust.
• S&P Global M'fing PMI also failed to impress, as headline index printed at 49.8 in July vs. June's 51.3. The survey pointed to a contractionary environment for the first time since September 2020 as manufacturers flagged headwinds from inflationary pressures and supply chain disruptions.
• Worth noting that BoK Gov Rhee will testify to parliament's economy committee today.
• Looking ahead, South Korea's CPI will be published tomorrow, with BoP current account balance coming up Friday.