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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.
KRW
1 month USD/KRW traded above 1338 on Friday evening, post the Asia close, which is fresh cyclical highs back to 2009. We ended the NY session around 1335.50. Note spot closed onshore on Friday at 1325.85, so a sharp pick up is likely in early trade today.
- The won is under pressure from broader USD strength, coupled with fresh equity weakness. Tech softness was evident on Friday evening, with the SOX dipping close to 2.80%, while the MSCI IT sub index down 1.9%. Core yields pressed higher.
- Onshore equities faltered through the tail end of last week, but offshore investors kept buying local equities. Cumulative net inflows were +$516mn for the week. This positive backdrop may be challenged if we continue to see softer equity market sentiment.
- On the data front today, South Korea's first 20-day trade figures are due for August. Exports gained 23% in the first 10 days of the month, while imports were +34%.
- Also out is BoK data on monthly FX deposits, while military exercises kick off between the US and South Korea and run through to the 1st of September.
- We will watch for rhetoric from the South Korean authorities today around FX levels, although comments from the Finance Minister late last week stated that won weakness was in line with other currencies.
- This doesn't suggest a great deal of concern, although the J.P. Morgan KRW NEER is trending lower, see the chart below. The won was the weakest performing EM Asia currency last week (-1.76%), although didn't fall as much as the yen (-2.73%).
Fig 1: J.P. Morgan KRW NEER Trending Lower
Source: J.P. Morgan/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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