Tight Trade, USD/KRW Catches Most Of The Attention

FX trade remains tight, with Tokyo participants unwilling to force a test of Tuesday’s fresh multi-year highs in USD/JPY, at least so far.

• The AUD looked through soft ANZ job ads data, with the data provider noting that “the record employment gain of 366,100 in November was likely a significant factor behind the fall, but we can’t rule out some dampening effect from Omicron. Still, Job Ads are 4.2% above the pre-Delta-lockdown peak in June 2021 and 36.8% above the pre-COVID level.”
• More broadly, the major USD crosses are little changed on the day, operating within 10 pips of Tuesday’s closing levels.
• The KRW has traded on the backfoot in early Seoul dealing, with the latest North Korean missile launch weighing on both the currency and KOSPI. The latter has also struggled in the wake of broader tech sector weakness on Tuesday, with the downtick in the KOSPI likely weighing on the KRW. USD/KRW is printing just shy of the KRW1,200 level as a result (a level not tested since October). Note that there is some market speculation that Korean authorities could step in to limit KRW weakness around this psychological level.
• Final services & composite PMI data from the Eurozone headlines the pre-NY docket, while U.S. ADP employment data and the minutes from the most recent FOMC decision will garner most of the attention later on Wednesday.