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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
KRW
Both onshore USD/KRW spot and the 1 month NDF probed lower not long after the open. The 1 month NDF got to a low of 1324.60, which was below post FOMC lows. We now sit back closer to 1327.50 (still +0.40% firmer in won terms versus the NY close), while onshore spot is back near 1330. Onshore equities opened weaker, but are away from session lows (the Kospi last -0.20%). US equity futures are also away from lows, which has helped at the margins.
- Lower USD/JPY levels are also likely to be helping, with the yen outperforming at the margins in the G10 space (the pair last under 134.50).
- More broadly, the sharp pull back in oil prices in recent sessions is aiding the South Korea terms of trade outlook, see the chart below, which plots the Citi terms of trade proxy against spot global energy commodity prices. This may also be helping to limit the fallout for the won today in terms of the broader risk averse backdrop.
- This can lead to an improved trade balance backdrop all else equal. The Apr trade deficit was -$2.62bn, an improvement on earlier 2023 lows sub -$10bn.
Fig 1: Falling Energy Prices Improve South Korea's ToT Outlook
Source: Citi/MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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