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South Korean MoF Sees FX Moves Excessive, Will Take Measures As USD/KRW Sinks Past 2019 Low

KRW

Spot USD/KRW gapped lower at the re-open and continued to lose altitude amid broader optimism, before South Korean MoF's jawboning kicked the pair off lows. USD/KRW last trades -7.55 fig .at KRW1,108.10, after bottoming out at KRW1,105.25.

  • An official from South Korean Ministry of Finance said that the recent moves in the FX market are excessive and the authorities will take aggressive measures on any moves that increase volatility.
  • Elsewhere, South Korean Financial Services Commission said it will lower the maximum legal lending rate to 20% from 24%. The change will be implemented from 2H2021.
  • That said, local the trend in the coronavirus situation remains worrying, with the country declaring 223 new cases today, an eleven-week high. Health authorities said they are "strongly" considering raising nationwide social distancing guidelines. This came after the government unveiled plans to implement special precautions ahead of the upcoming college entrance exams.
  • A dip through Dec 4, 2018 low/trendline support at KRW1,104.95/1,104.54 would open up the psychological KRW1,100.00 level, which has been intact since mid-2018. Conversely, a move through Friday's high of KRW1,116.70 would shift focus to Nov 4 high of KRW1,147.50.
  • There is little of note on South Korea's docket this week, with PPI coming up Friday.
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