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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.
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Free AccessMorgan Stanley Think KRW Has Overshot
- MS write that last week's break in USD/KRW above 1160 came amid weak sentiment due to rising daily new COVID-19 cases and the semi tech-led stock sell-off. More importantly, recent Street concern about Korea's semiconductor industry has been building and driving this round of sell-off in both KOSPI and KRW.
- They think that the FX market has overshot. According to historical patterns, MS think that USD/KRW can come back to 1145-1150 in the next 1-2 weeks.
- Historically speaking, when KRW weakened due to significant KOSPI selling from foreigners (i.e., selling size > 0.1% of total KOSPI market cap) for a few days in a row, usually foreign outflows would then stabilise for the next few days. KRW would then rebound.
- MS think that this time should be similar as well. In the near term, they don't expect USD/KRW to break above the 1170-1175 range in the next 1-2 weeks (unless DXY sees another leg of significant rally).
- They think that USD/KRW will retreat from 1169 back to 1145-1150 in the next few weeks, correcting the overshoot.
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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.