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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 once again found support ahead of the 1306 level. Earlier the pair dipped towards this zone, amidst broad USD weakness and better risk appetite. These trends have somewhat reversed now. 1 month USD/KRW last traded close to 1309.
- The Kospi is off earlier highs, but still positive on the day, at +0.30%. Outperforming Taiwan (-1%), which has felt greater pressure from tech underperformance overnight.
- There remains a wedge between KRW and local equity trends, see the chart below. This relationship suggests we should be closer to 1300 in the pair, but clearly there are a lot of other drivers at present, particularly ahead of key offshore event risks like the US FOMC decision.
- We haven't seen much positive follow through from the earlier GDP beat, although the won tends to be driven more so by export/equity trends. Exports were a drag for Q2 GDP and export growth to China remains negative at this stage.
- Higher USD/CNH levels has also helped USD/KRW push back up. USD/CNH is back to 6.7575, versus an earlier low just above 6.7450.
Fig 1: USD/KRW & Local Equities - A Modest Wedge Remains
Source: MNI/Market News/Bloomberg
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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