Exports Continue To Soar

The won is weaker in early trade, USD/KRW up 4.20 at 1130.35 – the pair has erased most of yesterday's decline. The pair has moved in a range since the Fed meeting in June, moving between 1125 and 1140, 2021 highs are not far off at 1142.60.

• Data showed the trade surplus widened to $4.440bn in June from $2.94bn previously, but slightly narrower than expectations. Exports rose for the eighth straight month, up 39.7% and beating estimates of 33.8% while imports rose 40.7% above estimates of 33.6%. The strong gains in exports, even as a low base effect starts to fade, indicates a robust global recovery. Exports are expected to reach a record this year and will be the main driver of the recovery.
• Elsewhere IHS Markit South Korea June Mfg PMI rose to 53.9 from 53.7 in May. Commenting on the latest survey results, Usamah Bhatti, Economist at IHS Markit, said: "June data provided proof that the South Korean manufacturing sector remained firmly in expansion territory at the end of the second quarter of 2021. The latest Manufacturing PMI reading picked up from the previous month and indicated that the health of the sector continued to improve solidly throughout the quarter."
• On the coronavirus front there were 762 new cases in the past 24 hours, down slightly from Wednesday but still above the important 600 threshold and holding near a two month high. Due to the concentration of cases in the greater Seoul area, the health authorities decided to tighten restrictions in the capital area for two weeks till July 14. The local authorities also announced later in the day the greater Seoul area will hold off on implementing the central government's eased social distancing scheme for one week, just hours before the new rules were set to take effect. If virus cases continue to increase, the social distancing level will be raised across the country.