USD/KRW Dips Sub 1295 Still Supported

Spot USD/KRW opened lower in early trade today, dipping towards 1296, after closing last week just above 1300. We have stabilized now back above 1297, as broader USD sentiment is firmer among the majors. Demand for USD/KRW is evident on moves sub 1295.

• The first 10 days of trade data for July has just printed. Exports rose 4.7% YoY, while imports gained 14.1% in YoY terms. The trade deficit was a wide $5.53bn, but this should improve as the month progresses. Daily average exports were also resilient at 19.7% YoY in the first 10days of the month.
• On the equity front, the lead from tech remains positive for local equities today. The SOX and MSCI IT index finished last week higher. TSMCs better than expected Q2 earnings aided broader sentiment.
• The Kospi is opening a touch firmer in early trade (last +0.30%). To recap, the Kospi ended Friday up 0.7%, the Kosdaq slightly firmer at +1.12%. Offshore investors bought just under $350mn local shares last week, the first positive net weekly inflows since the start of June.
• Looking ahead, the data calendar is second tier with bank lending to households due at some stage this week, while money supply figures print tomorrow.
• Wednesday will be the main focus point with the BoK decision due. At this stage, the consensus is for a 50bps hike (taking the policy rate to 2.25%). 13 out of 17 economists surveyed by Bloomberg expect a 50bps hike.