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KRW: Spot USD/KRW Makes Fresh Highs, BoK Expected To Cut Today

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Spot USD/KRW ended extended Thursday trade at 1354, so at fresh highs back to Aug 19. The 1 month NDF finished up near 1348.5 in Thursday NY trade, off intra-session highs near 1353.5. USD/JPY weakness amid lower front end US yields likely helped the 1 month NDF shift lower. This may aid spot won in the first part of trade, although short term momentum remains skewed higher in the pair. For spot, the 20-day EMA is back near 1337, while upside focus is likely to rest at 1360. 

  • We have the BoK decision coming up, where a strong majority of sell-side economists expect the central bank to commence its easing cycle with a 25bps cut. This is also our bias, see our full preview here.
  • We don't expect this to be the start of an aggressive easing cycle, given financial stability/house price focus points for the BOK. Such a backdrop could also undermine the won and bring back imported inflation pressures.
  • Elsewhere for KRW, we have the global equity backdrop. Tech indices faltered modestly in Thursday trade, the SOX down 0.53%, while the MSCI IT was close to unchanged. To recap, the Kospi ended up 0.19% yesterday, while offshore investors were modest buyers of local stocks.  
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Spot USD/KRW ended extended Thursday trade at 1354, so at fresh highs back to Aug 19. The 1 month NDF finished up near 1348.5 in Thursday NY trade, off intra-session highs near 1353.5. USD/JPY weakness amid lower front end US yields likely helped the 1 month NDF shift lower. This may aid spot won in the first part of trade, although short term momentum remains skewed higher in the pair. For spot, the 20-day EMA is back near 1337, while upside focus is likely to rest at 1360. 

  • We have the BoK decision coming up, where a strong majority of sell-side economists expect the central bank to commence its easing cycle with a 25bps cut. This is also our bias, see our full preview here.
  • We don't expect this to be the start of an aggressive easing cycle, given financial stability/house price focus points for the BOK. Such a backdrop could also undermine the won and bring back imported inflation pressures.
  • Elsewhere for KRW, we have the global equity backdrop. Tech indices faltered modestly in Thursday trade, the SOX down 0.53%, while the MSCI IT was close to unchanged. To recap, the Kospi ended up 0.19% yesterday, while offshore investors were modest buyers of local stocks.