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USD/KRW Back Sub 1390, Authorities Meet With Firms Today To Discuss FX

KRW

1 month USD/KRW didn't get beyond 1395 post the Asia close. We spent most of the NY session trending down, closing at 1388, as risk appetite improved in the equity space. Onshore spot closed yesterday at 1393.65. The focus today will be on talks between the authorities and exporters/importers to improve the underlying FX supply and demand outlook.

  • Today's meeting comes after it was reported yesterday that banks were required to report on USD transactions every hour (up from the previous 3 times a day).
  • One step that could come out today's meeting is to encourage importers to issue bonds offshore to raise needed FX that way.
  • Elsewhere it was reported that South Korea is on track to fill LNG reserves to 90% by November. This is to ensure supply during the coming winter months.
  • Such flows are adding to the trade deficit though, all else equal. Note we get an update tomorrow on the trade backdrop, with the first 20 days of trade data for September due.
  • The trade deficit fell to a fresh record wide in August (-$10.2bn).
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1 month USD/KRW didn't get beyond 1395 post the Asia close. We spent most of the NY session trending down, closing at 1388, as risk appetite improved in the equity space. Onshore spot closed yesterday at 1393.65. The focus today will be on talks between the authorities and exporters/importers to improve the underlying FX supply and demand outlook.

  • Today's meeting comes after it was reported yesterday that banks were required to report on USD transactions every hour (up from the previous 3 times a day).
  • One step that could come out today's meeting is to encourage importers to issue bonds offshore to raise needed FX that way.
  • Elsewhere it was reported that South Korea is on track to fill LNG reserves to 90% by November. This is to ensure supply during the coming winter months.
  • Such flows are adding to the trade deficit though, all else equal. Note we get an update tomorrow on the trade backdrop, with the first 20 days of trade data for September due.
  • The trade deficit fell to a fresh record wide in August (-$10.2bn).