USD/KRW Backs Away From 1400 Break, As Authorities State FX Move Excessive/One-Sided

1 month USD/KRW mostly drifted lower post the Asia close on Tuesday. We finished up near 1388, after earlier highs around 1398. Onshore spot finished at 1394.65, after touching 1400 in earlier trade. Won losses were stemmed after the authorities stated excessive one-sided FX moves are not desirably for the local economy

• There was a joint statement by the FinMin and the BoK's international department. This was the first such joint statement on FX since June 2022 (see this BBG link for more details).
• This likely encouraged some exiting from long USD/KRW positions as Tuesday's post Asia session unfolded. As we have also highlighted recently, USD/KRW was in overbought territory, which may have also encouraged some trimming of longs.
• Levels wise, clearly 1400 will be an upside focus and viewed as a potential near term line in the sand. For the 1 month NDF the 20-day EMA sits back near 1359.3.
• Cross asset sentiment was mixed for the won through US trade, with some tech equity outperformance. The SOX rose nearly 0.90%, while the MSCI IT posted a marginal gain up 0.1%. These trends outperformed broader equity losses for the main US/EU indices. Still, US yields continued to push higher, as Fed Chair Powell stated a lack of further progress on inflation.
• To recap, offshore investors sold -$305.7mn of local equities yesterday, as the Kospi fell more than 2%.
• The data calendar is empty until the first 20-days of trade data for April prints next Monday.