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Unemployment Rate Drops, But Mind The Caveats

KOREAN WON

Tuesday's/early doors risk-off impetus pushed USD/KRW higher as onshore South Korean markets re-opened, despite better than expected headline jobs data. Spot last deals +3.45 fig. at KRW1,189.90.

  • The unemployment rate dipped to 3.2% from 4.2% in August, with consensus forecast seeing it unchanged. The unexpected drop was largely driven by people quitting the labour market, while FinMin Hong said that September data will better reflect the introduction of tighter social distancing rules.
  • As a reminder, the government is planning to submit a KRW7.5tn extra budget to parliament this week to try and shore up the economy.
  • Elsewhere, Vice FinMin Kim said that South Korea will actively stabilise the bond market if volatility in yields surges.
  • ICYMI, late on Tuesday the BOK said that it will purchase about KRW5tn worth of government bonds by year-end.
  • Meanwhile, South Korea started marketing dollar-denominated bonds today.
  • On the Covid-19 front, South Korea said that its daily case count has "stably lowered" to the 100 level.
  • Bulls look for a break above the 50-DMA at KRW1,192.21 before targeting Aug 3 high of KRW1,196.05. On the flip side, a fall through Aug 31 low of KRW1,179.10 is needed to reinstate bearish momentum.
  • Nothing much left on South Korea's docket during the remainder of this week.

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