Won Rallies More than 1%

Spot USD/KRW has dropped by more than 1% so far today, now down at the 1253 level, lows going back to late April.

• Positive equities around the region, although Kospi gains are more limited, has helped, as has broadly weaker USD sentiment. Still, KRW is leading all comers, with the next best performer in terms of the majors being NZD at 0.60% on the day.
• For other USD/Asia pairs the moves lower have in the 0.2-0.3% range for the most part. USD/CNH is well off early highs of +6.7800 to 6.75, but won gains are still much stronger.
• Recall also the increased focus on FX stability on the part of the Korean authorities. It did make its way into the joint leader's statement released after the Biden-Yoon weekend summit.
• While in of itself not a won positive, it probably discouraged fresh USD/KRW longs (i.e. with the view a break above 1300 has diminished as a near term risk).
• Won bulls will be eyeing a break down through 1250. Note the 50 day MA comes in at 1245, which is also around the highs from mid March.