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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
Spot USD/KRW is up nearly 1% so far in Wednesday trade. This puts the pair back in the 1292/93 region. This is highs back to earlier parts of June. Just above the 1300 level sits the 50-day MA around 1302.50. On the downside recent dips come in under 1270.
- Earlier today we had the first 20-days of trade data for June, which showed tentative signs of a less adverse export backdrop. Why hasn't this benefited the won? Regional equity markets are mostly weaker, with the Kospi off by 0.65% so far today, putting the index back sub the 2600 level.
- Offshore investors have sold just over $300mn of local shares, bringing week to date outflows close to $1bn. Higher USD/CNH levels (the breach of 7.2000) may also be having an impact.
- Even after today's correction, the won is still the best EM Asia FX performer in June to date (+2.6%, with PHP next best at ~1%).
- In this sense a better export backdrop may already be priced by the won to some degree. The chart below plots y/y KRW/USD changes against export growth, assuming current spot KRW levels hold to end June. Note the export line is for full month exports, not the 20-day update released earlier today, so is only up to date for May figures.
Fig 1: South Korea Export Growth & KRW/USD Y/Y Changes
Source: 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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