Onshore KRW finished the session.........>

KOREAN WON: Onshore KRW finished the session stronger against the USD, but well

off the best levels of the day, ending at 1212.65. The USD/KRW rate gapped lower

at the open, hitting lows of 1206.50 before rallying around 0.5% into the close.

The initial optimism was wholly based on the delay in the imposition of a

further wave of trade tariffs on Chinese goods headed to the US and was further

supported by the better-than-expected CNY fix, providing more evidence that the

PBoC are acting to mute volatility. Offshore KRW NDF outrights continue to creep

higher in European hours, with another bout of strength following the USD bid.

-The near-term vol structure for USD/KRW remains elevated, with the 3m/18m curve

still inverted, but 1m vols remain well shy of the multi-month highs seen in

early August.

-Tensions clearly remain high between South Korea and Japan, although the

market's paying little attention to the trade spat. The country's vice foreign

ministers are due to be meeting on August 16th/17th to discuss recent export

curbs.