One-Sided FX Moves Warning May Cap USD/KRW Upside

1 month USD/KRW was above 1345 late yesterday, but this level once again marked the high. The South Korean Finance Minister stated late yesterday that FX moves may be one-sided in a meeting with the central bank and regulators. Note spot ended the onshore session at 1345.70, but should see early downside pressure today. The 1 month NDF finished the NY session at 1339.

• Rhetoric around one-sided moves in FX markets further suggests that we may be at near term line in the sand from a USD/KRW stand point.
• A more range bound environment for the pair may unfold over coming sessions, with moves towards 1345 or above likely to draw some selling interest. On the downside just under 1330 could see some USD demand emerge.
• Earlier, South Korean manufacturing and non-manufacturing sentiment improved. The manufacturing reading rose to 82 from 78 last month, while non-manufacturing edged up to 82 from 80. This is in line with yesterday's improvement in domestic consumer sentiment.
• The Kospi remained under pressure yesterday (-1.10%), although overnight equity market weakness in the majors was more modest. Net equity inflows into Korea stocks continued yesterday, +20.4mn, but at slower pace compared to Monday's session.