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KRW
Spot USD/KRW continues to gravitate higher. The pair was last near 1389, around 0.35% weaker in won terms for the session so far. June 27 highs came in just under 1395, which could be an upside target on a further extension higher.
- The pair fell sharply into June end, diverging from softer JPY and CNH trends. Month end/quarter end flows may have been supportive for the won. Broader USD trends remained supportive over this period, which now appear to be re-asserting themselves, underpinned by a firmer yield backdrop.
- Still, spot has spent little item in the 1390/1400 region this year (see the chart below), so such a move may draw a policy response.
- On the downside, important support is likely around the 50-day EMA, near 1372. We have spent little time sub this support zone (outside of the mid-May period).
- The data calendar is largely light until next Thursday's BoK decision. Inflation trends are edging towards an easing in H2, although fresh dovish signals would likely undermine the won, all else equal.
Fig 1: Spot USD/KRW Versus Key EMAs
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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