Unexpected Pick-Up In South Korean CPI Inflation Supports KRW

Spot USD/KRW gapped lower at the re-open of onshore trade, catching up with yesterday's greenback sales and reacting to better than expected CPI data released out of South Korea this morning. The pair briefly showed under Sep 21 cycle low, before ticking away from worst levels. It last sits -5.90 fig. at KRW1,157.50.

• Inflation figures were boosted by firmer food prices, as heavy rainfalls from over the summer and the Chuseok holiday pushed them higher. Although headline CPI was expected to slow to +0.5% Y/Y from +0.7% and the core metric was forecas to remain at +0.8% Y/Y, both accelerated to +1.0% and +0.9% respectively.
• Meanwhile, albeit the country's daily coronavirus case count remained under 100 for the fifth day yesterday, South Korean health officials remain on alert for any signals of renewed spread of infections in the aftermath of national holidays.
• A clean break under Sep 21/intraday lows of KRW1,157.15/00 would shift focus to Jan 14 low of KRW1,150.65, the YtD low and key near-term support. Bulls look for a rebound above Sep 28 high of KRW1,174.80, which would open up the 50-DMA at KRW1,182.97.
• South Korean BoP current account balance is due Thursday.