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Won Rebounds, USD/KRW Back Close to 1300

KRW

1 month USD/KRW traded down sharply through the NY session, from highs above 1310 we closed at 1302.5. Note onshore spot ended yesterday just above 1310, so the early tone should be to the downside for the pair. Won gains were in the line with the majors, particularly the yen. Note dips below 1300 in USD/KRW have generally been supported since early July (the late July low in the pair was around 1295).

  • To recap, the Kospi edged higher by nearly 0.5% yesterday, while the Kosdaq gained 1.2%. Overnight equity sentiment was mixed in US markets, although tech still outperformed (the SOX +0.92%, MSCI IT +0.50%).
  • Offshore investors continued to buy local shares. Yesterday we had a further $252.21mn in net inflows. This brings week to date net inflows to just under $1bn.
  • The won can play catch further up with equity strength, but note USD/KRW is also moving in line with USD/JPY fairly closely, so yen shifts are also be important.
  • On the data front, the BoP current account balance has just printed for June, showing an improvement to $5.6bn from $3.86bn in the previous month. The goods balance also improved. There is no consensus for these prints, so it’s unlikely to be a market mover.
  • A government survey of companies with 100 employees or more showed wage growth exceeded 5% in the first half of the year. This is the strongest pace since 2003. Note the survey covered 3600 firms.
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1 month USD/KRW traded down sharply through the NY session, from highs above 1310 we closed at 1302.5. Note onshore spot ended yesterday just above 1310, so the early tone should be to the downside for the pair. Won gains were in the line with the majors, particularly the yen. Note dips below 1300 in USD/KRW have generally been supported since early July (the late July low in the pair was around 1295).

  • To recap, the Kospi edged higher by nearly 0.5% yesterday, while the Kosdaq gained 1.2%. Overnight equity sentiment was mixed in US markets, although tech still outperformed (the SOX +0.92%, MSCI IT +0.50%).
  • Offshore investors continued to buy local shares. Yesterday we had a further $252.21mn in net inflows. This brings week to date net inflows to just under $1bn.
  • The won can play catch further up with equity strength, but note USD/KRW is also moving in line with USD/JPY fairly closely, so yen shifts are also be important.
  • On the data front, the BoP current account balance has just printed for June, showing an improvement to $5.6bn from $3.86bn in the previous month. The goods balance also improved. There is no consensus for these prints, so it’s unlikely to be a market mover.
  • A government survey of companies with 100 employees or more showed wage growth exceeded 5% in the first half of the year. This is the strongest pace since 2003. Note the survey covered 3600 firms.