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KRW: USD/KRW Eyeing 1300 Test, BoK/FinMin Speak Today

KRW
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Spot USD/KRW sits just under 1310 in early Monday trading. Extended Friday trade saw the pair hit fresh lows of 1307, before some support emerged. A break sub this level could see round figure support at 1300 targeted, which appears the short term risk. On the topside, the declining 20-day EMA is back near 1334. 

  • Won has multi supports in terms of firmer CNH and JPY levels (although yen is underperforming in the first part of Monday trade). USD/CNH is eyeing a test of recent lows near 6.9700.
  • Further China news around easing housing curbs in major cities over the weekend may also benefit China related assets today and see positive spillover to KRW.
  • Japan equity market is evident today, while the SOX and the MSCI IT indices both fell in Friday trade. Early Kospi trends are slightly weaker this morning, off 0.20%. Offshore investors remain net sellers of local equities last week (-$528mn) but the pace of outflows is slowing. These are potential won headwinds but USD/KRW upticks will still likely be sold.
  • On the data front, Aug IP rose, but is sitting well off early cycle highs in y/y terms. We also have a town hall with the BoK Governor and Finance Minister in attendance today. This comes ahead of next week's BoK decision, where there will be some speculation that the central bank starts its easing cycle.
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Spot USD/KRW sits just under 1310 in early Monday trading. Extended Friday trade saw the pair hit fresh lows of 1307, before some support emerged. A break sub this level could see round figure support at 1300 targeted, which appears the short term risk. On the topside, the declining 20-day EMA is back near 1334. 

  • Won has multi supports in terms of firmer CNH and JPY levels (although yen is underperforming in the first part of Monday trade). USD/CNH is eyeing a test of recent lows near 6.9700.
  • Further China news around easing housing curbs in major cities over the weekend may also benefit China related assets today and see positive spillover to KRW.
  • Japan equity market is evident today, while the SOX and the MSCI IT indices both fell in Friday trade. Early Kospi trends are slightly weaker this morning, off 0.20%. Offshore investors remain net sellers of local equities last week (-$528mn) but the pace of outflows is slowing. These are potential won headwinds but USD/KRW upticks will still likely be sold.
  • On the data front, Aug IP rose, but is sitting well off early cycle highs in y/y terms. We also have a town hall with the BoK Governor and Finance Minister in attendance today. This comes ahead of next week's BoK decision, where there will be some speculation that the central bank starts its easing cycle.