USD/KRW Drifting Higher As Equities Weaken

Early impetus in USD/KRW is to the upside. Spot is back to the 1328 region (note highs from yesterday were close to 1332.50). The 1 month NDF is back to 1325/26, +030% above NY closing levels. Weakness in the G10 majors, AUD and NZD etc, is likely adding to the bid tone.

• Onshore equities are underperforming within the region. The Kospi off by more than 1% at one stage but now -0.60%. The Kosdaq is -0.50%. Modest selling is evident from offshore investors, with -$42mn in outflows, bringing week to date flows back slightly negative.
• After a strong run higher for local equities, some onshore based analysts are calling for a more cautious outlook, amid aggressive retail investor buying (see this link for more details).
• This is likely weighing on KRW at the margins, although the relationship between USD/KRW and local equities remains sub 2022 levels.
• Elsewhere, new BoK board member Park Chun-Sap stated many sectors of the economy experiencing difficulty after the rapid pace of hikes. At face value this suggests Park will unlikely to be arguing for a resumption of rate hikes.
• The first 20-days trade data for April maintained recent trends around on-going headwinds to export growth.