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Holding Above 1380, Authorities Aiming To Curb NPS Influence On USD/KRW

KRW

USD/KRW spot ended extended Tuesday trade at 1385.5. a further won loss of 0.14%. The 1 month ended Tuesday NY trade slightly lower though, near 1381. This reflected weaker USD sentiment, with broader USD sentiment weighed by a lower US yields across the curve. USD highs were marked post the retail sales beat.

  • For USD/KRW, we are somewhat stuck between the softer US yield backdrop, a dollar negative, against still generally elevated USD/CNH and USD/JPY levels. Both the yen and yuan generally underperformed the major FX moves through Tuesday.
  • Spot USD/KRW remains above all key EMAs, with the 20-day near 1381, while the 50-day is back closer to 1375.
  • The equity lead is mixed for the Kospi today, although US markets were higher in Tuesday trade. The SOX rose, but the MSCI IT was down modestly. To recap, the Kospi finished marginally higher in Tuesday trade, up 0.18%, while offshore investors added just under $72mn to local stocks.
  • The local data calendar remains empty. Onshore media reported yesterday that the South Korean government is looking to expand the National Pension Service (NPS) advance dollar funding limit. The aim would be to spread out the NPS's dollar buying to limit the impact on USD/KRW (see this BBG link for more details).

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