USD/KRW Clearly A Focus Point For Policy Makers

The Korean won is getting a lot of air time at the start of BoK Governor Rhee's press conference. He has stated that the BoK is monitoring how the FX rate is affecting the economy, while adding that today's 25bps move should help stem some of the weaker won trend. The central bank is also considering how the weaker won impacts domestic inflation. The Governor added that the central bank is not targeting a specific level of the exchange rate.

• These comments come after the South Korean Finance Minister warned against one-sided moves in the FX market earlier in the week. While the South Korean President has also highlighted FX and broader financial market volatility. Hence the won is clearly a strong focus point for domestic policy makers at the moment.
• USD/KRW is continuing to trend lower. The 1 month NDF is now around 0.5% below NY closing levels, last around 1334. Higher onshore equities are helping, as well as softer USD sentiment against the majors.
• The high 1325/30 region may see some USD support emerge if the pair continues to correct lower.