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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
1 month USD/KRW is probing multi-week lows in early trade today. We are just above the 1260 level, with onshore spot opening around this level, 0.60% below yesterday's close.
- Tech equity sentiment was buoyant overnight. The SOX index gaining close to 3.9%, while the MSCI IT index rose 2.33%. The China Golden Dragon index also rose by 7.6%, although is only modestly higher for the week. The move lower in the VIX aided the risk sensitive won as well.
- This should see Korean equities have a positive finish to the week, although the Kospi was still down slightly in trade yesterday. Offshore investors added +$17mn in local shares. Net outflows for the week are just under $400mn.
- Onshore swap rates held gains post yesterday's hawkish BoK 25bps hike. Yield differentials haven't been a key driver of the won though.
- There is now a reasonable wedge between USD/KRW and USD/CNH, see the chart below. CNH weakness appears to be the main impediment to further won strength in the near term.
Fig 1: USD/KRW & USD/CNH Trends
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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