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USD/KRW Down From Recent Cyclical Highs

KRW

Spot USD/KRW is sharply lower, down more than 0.80% and back sub 1280. This largely reflects catch up to the 1 month NDF, which closed sub this level in NY but hasn't see a great deal of follow through today, we were last at 1279.50.

  • Korean equities are finally seeing a rise, with the Kospi 2% higher and on track for the first gain in 7 sessions. Leads from tech equities were positive overnight.
  • We will see offshore investors return today. It is certainly possible - yesterday saw $480.5mn in net outflows, bringing week to date outflows to over $1bn. June has seen close to 3.15bn in net outflows.
  • Still, periods of foreign inflows have proved fleeting this year. It remains to be seen what can drive a concerted turn around in this picture.
  • Earlier, Korea trade prices printed for May. Import price momentum picked up to 36.3% from a revised 35.4% gain in April. Export prices also firmed to 23.5% from 22.0% in the previous month.
  • South Korea officials vowed to stabilize bond and FX markets if needed. BoK Governor Rhee stated the consensus remains on containing price pressures in South Korea. He also wouldn't be drawn on whether a big step up in the pace of BoK rate hikes is needed. The next BoK meeting is on July 13.

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