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KRW: Spot USD/KRW Holding Above 1450

KRW
EM BulletBulletSouth KoreaAPACEmerging Market News

Spot USD/KRW edged higher in Monday trade, getting close to 1455, before closing at 1451.65. This was a won loss of 0.31% for the session, broadly in line with USD index gains recorded for Monday's session. Recent highs at 1460.2 remain intact for now, but are likely to represent an upside target for the market. 

  • We remain in an uptrend for the pair, with 20-day EMA continuing to trend higher, last near 1428. We are overbought per the RSI (14), with the score of 74.9.
  • The authorities are likely to remain vigilant to sharp FX weakness, particularly as liquidity lightens over the upcoming holiday period. There will also be focus on any pick up in FX hedging, particularly from the National Pension Service above the 1450 level, although this may not be known until after the fact.
  • Today's data underscores the economic challenges facing the country though, with very weak consumer sentiment for Dec, the headline falling to 88.4, the lowest print since late 2022. Still, inflation expectations remain elevated and near 3%.
  • The broader tech equity backdrop has turned more supportive recently, but hasn't done much to support the won. Focus is on lower policy rate risks, along with spill over from potential trade/tariff tensions in 2025.
  • Note the BoK releases the financial stability report at 11am local time today. 
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Spot USD/KRW edged higher in Monday trade, getting close to 1455, before closing at 1451.65. This was a won loss of 0.31% for the session, broadly in line with USD index gains recorded for Monday's session. Recent highs at 1460.2 remain intact for now, but are likely to represent an upside target for the market. 

  • We remain in an uptrend for the pair, with 20-day EMA continuing to trend higher, last near 1428. We are overbought per the RSI (14), with the score of 74.9.
  • The authorities are likely to remain vigilant to sharp FX weakness, particularly as liquidity lightens over the upcoming holiday period. There will also be focus on any pick up in FX hedging, particularly from the National Pension Service above the 1450 level, although this may not be known until after the fact.
  • Today's data underscores the economic challenges facing the country though, with very weak consumer sentiment for Dec, the headline falling to 88.4, the lowest print since late 2022. Still, inflation expectations remain elevated and near 3%.
  • The broader tech equity backdrop has turned more supportive recently, but hasn't done much to support the won. Focus is on lower policy rate risks, along with spill over from potential trade/tariff tensions in 2025.
  • Note the BoK releases the financial stability report at 11am local time today.