USD/KRW Back Below KRW1,300

Spot USD/KRW plays catch up to Thursday’s weakness in the broader USD and European/NY NDF follow through to yesterday’s outlining of a fresh, upsized FX swap line agreement between the South Korean FX regulatory body and the National Pension Service. Spot USD/KRW trades to the lowest level seen so far in April (KRW1,297.80), while 3-month NDFs look through Thursday’s low. USD/KRW has broken below uptrend support drawn off the YtD base, leaving the 50-DMA (KRW1,297.53) as immediate technical support. A break through there would expose the 100-DMA (KRW1,289.03), which protects the Mar 23 low (KRW1,276.35).

• In terms of local news flow, BoK Governor Rhee has pointed to a continued focus on inflation, telling BBG that the Bank’s “war on inflation” is not over, leaving the door open to further tightening, if required (even with rates in “restrictive” territory). Rhee also played down any focus on targeting a specific level for USD/KRW.
• Any worry surrounding the impact of yesterday’s missile test out of North Korea hasn’t had a lingering impact on the KRW given the above matters, but one KRW headwind that we will re-flag is the previously outlined South Korea corporate dividend payment schedule (which will see over KRW4.5tn funnelled to international investors through April, per BBG estimates, mostly in the mid- to end-month period).