July 05, 2022 00:28 GMT
Spot USD/KRW is down in early trade today, dipping as far as 1294, but we have settled back at 1295.50. The 1- month NDF dipped overnight and currently tracks at 1295.
- Korean equities have opened higher, +1.00% for the Kospi at this stage. US tech futures are pushing higher, aiding by optimism around a potential US-China tariff shift, which is seeing some positive spill over to Korean markets.
- To recap, yesterday saw $137.6mn in net equity outflows from offshore investors, as the Kospi eased 0.22%.
- The won may also be receiving some support from increased rate hike expectations, although BoK shifts have done little to stem the won's decline over the past year and the historical correlation between USD/KRW and Korea-US yield spreads is not that high.
- As we noted earlier a 50bps hike may well be a done deal at the July BoK meeting given upside inflation pressures. A 6% YoY headline pace for June, while core rose to 4.4% YoY.