USD/KRW Edges Higher, Yields Lower As Expectations Of A Cut Increase

The USD/KRW rose by 0.27% hitting a high of 1,385.45.40, marking the highest level since May 31. The decline in the KRW is influenced by the yuan's losses, driven by the PBOC's weakest fixing since November. Local bond yields have also declined to near 6 months lows on expectations the BOK may lower interest rates.

• USD/KRW is off earlier highs and now trades up 0.15% at 1,383.80, while the USD/KRW 1M NDF tested June 18 highs of 1,382.96 before paring gains and trades up 0.11% at 1,381.40.
• A committee of South Korea’s ruling party will meet with BOK and Financial Services Commission officials on June 27 to discuss interest rate issues, including potential rate cuts and reducing the interest rate burden for citizens. Some ruling party officials are advocating for a rate cut, but BOK Governor Rhee Chang-yong emphasizes the independence of the monetary policy board's decisions.
• Global funds bought a net $42.9 million of South Korean bonds on June 19.
• The divergence between the Kospi and Kosdaq continues to widen, with the Kospi now outperforming by 7.45% this year, with the majority of those moves being attributed to the likes of Samsung. Today the Kospi is up 0.31%, while the Kosdaq is down 0.40%.
• Looking ahead to friday we have PPI due out early followed by 20-day Import/Exports for June.