Psychological Level Under Pressure

Spot USD/KRW breached the KRW1,200.00 and printed its best levels since Jul 2021, as onshore markets re-opened in South Korea, absorbing the market impetus generated by the release of hawkish FOMC minutes. Geopolitical tensions on the Korean peninsula are exacerbating the won's pain, after North Korea conducted a missile test on Wednesday.

• FOMC minutes suggested that Fed policymakers might raise interest rates earlier and faster, with some advocating a sooner balance sheet reduction.
• Pyongyang's state media KCNA confirmed this morning that the DPRK successfully test-launched a "hypersonic" missile on Wednesday. The official confirmation came after the South Korean military noted that the North fired an apparent ballistic missile toward the East Sea.
• Spot USD/KRW trades +2.60 figs at KRW1,199.55 at typing, with bulls looking for further gains past Jul 24, 2020 high of KRW1,203.10 towards Jul 14, 2020 high of KRW1,207.75. Bears need a fall through the 50-DMA at KRW1,183.95 to get some reprieve.
• USD/KRW 1-month NDF last seen at KRW1,200.74, a touch higher on the day. A clearance of Oct 12 high of KRW1,201.63 would bring Jul 24, 2020 high of KRW1,203.75 into play. Bears keep an eye on the 50-DMA at KRW1,185.92.