South Korea's Inflation Remains Elevated, Gov't Extends Covid-19 Restrictions

Spot USD/KRW remains on a softer footing, in the wake of yesterday's post-ECB greenback sales. Domestically, the main focus fell on monthly CPI data and an update on Covid-19 rules. The rate last operates -6.60 figs at KRW1,199.90, with bears looking for a fall through the 50-DMA at KRW1,189.91 towards the 100-DMA at KRW1,184.53. Bulls keep an eye on Jan 28 cycle high of KRW1,207.25.

• USD/KRW 1-month NDF last -1.10 fig at KRW1,200.45. Downside focus falls on the 50-DMA at KRW1,191.24, with bulls looking to a rebound above Jan 28 high of KRW1,214.39.
• South Korea's consumer prices grew 3.6% Y/Y in January, beating the median estimate of +3.4%, while slowing from December's +3.7%. Core CPI inflation accelerated to +3.0% from +2.7% prior, overshooting the consensus forecast of +2.8%. Both measures remained comfortably above the BoK's +2.0% target, but there is speculation that the central bank could hold off on another rate hike this month, with Gov Lee set to step down after that meeting.
• PM Kim announced that the current Covid-19 countermeasures will be extended by two weeks, as the Omicron variant continues to drive a surge in new infections. The restrictions were originally scheduled to end this Sunday, but will now remain in place through Feb 20.