USD/KRW August Lows Remain Intact, But Won Outperforming Some Other Asian Currencies

Spot USD/KRW is testing sub 1360 as onshore markets return today after yesterday's break. Still downside is proving to be fairly limited at this stage. Earlier August lows close to 1355 remain intact at this stage. The 1 month NDF is back to 1356/57, also above recent lows.

• Onshore equities are tracking strongly higher in the first part of Friday trade, up nearly 2%. The Kospi has been unable to breach the 2700 level at this stage, but is recouping most of the losses from the first part of August.
• Better US data has seen recession fears ease, aiding the broader equity recover. This is helping offset the firmer US yield backdrop from the second half of this week.
• This is evident in terms of relative won outperformance versus some of the South East Asian currencies. IDR, PHP and MYR are all off around 0.30% at this stage. Some of the these SEA currencies are more sensitive to Fed outlook shifts compared to the won.
• Looking ahead to near week, we have consumer confidence, manufacturing sentiment and the first 20-days of trade figures for August. The BoK decision is out on Thursday, although no change is expected from the economists surveyed by BBG at this stage.
• This is in line with recent resilient data, with inflation and jobs figures stronger than expected in recent weeks.