USD/KRW Consolidates Ahead Of Key Tech Equity Earnings, Domestic Policy Support Rising

Spot USD/KRW sits near 1331 in latest dealings. This is slightly weaker in won terms for the session, which is in line with broader USD trends in the EM Asia region (with only USD/PHP down so far today and this reflects catch to recent USD weakness as onshore markets were closed yesterday).

• For the won, this leaves us roughly in the middle of the range for the past week of so. The broader technical backdrop still argues for a downside test of yesterday's low just under 1320. Recent highs are just under 1344, while the simple 200-day MA is near 1345.5, where we would expect selling interest to emerge.
• Still, cautionary points come from the RSI (14) being close to oversold territory, while in the equity space the Kospi is struggling to make much headway above 2700. The turn around in local equities led the recent rebound in the won. Sentiment may also be tempered ahead of tech bellwether's Nvidia earnings this week.
• Offshore investors remain net sellers of local equities, with a further -$151.3mn in outflows so far today, bringing week to date outflows to -$581.6mn.
• July spending data for department stores/retail sales slowed noticeably versus June. Fiscal policy looks to be stepping up to aid the domestic growth backdrop. It will also likely nudges the odds towards easier BoK policy settings.