Unemployment Rate Tumbles But Participation Shrinks

Spot USD/KRW has added nearly 2 figs so far and changes hands at KRW1,172.70, following the release of South Korea's jobs report. Bulls look to take out Sep 13 high of KRW1,176.95 before targeting Aug 20 high of KRW1,181.10. On the flip side, a pullback under the 50-DMA at KRW1,157.23 would bring Sep 6 low of KRW1,154.00 into play.

• USD/KRW1-month NDF last seen at KRW1,173.43, ~1 figure above neutral levels. A clearance of Sep 13 high of KRW1,177.82 would shift focus to Aug 20 high of KRW1,184.78, while losses past the 50-DMA at KRW1,157.90 would expose Sep 3 low of KRW1,153.05.
• South Korea's seasonally adjusted unemployment rate unexpectedly plunged to a record low of 2.8% in August from 3.3% recorded in July, while BBG consensus forecast pointed to an uptick to 3.5%. Statistics Korea flagged a decline in the participation rate (to 62.8% from 63.4%), which fell to its lowest point since March. The economy added 518k jobs from a year earlier, which represented a slowdown from the annual employment growth of 542k registered in July.
• The labour market report covered a month when South Korea was hit by the fourth wave of Covid-19 and responded by implementing its strictest-ever social distancing guidelines. The current outbreak is far from over, with daily case count topping 2,000 today amid a record surge in infections detected in the greater Seoul area.
• Meanwhile, FinMin Hong said that the gov't will look into additional steps to tackle household debt, including tighter lending rules for non-banking institutions.