USD/KRW Edges Lower Ahead Of MoF & FX Dealers Meeting

USD/KRW is down from session highs, after starting the session above 1306, we last tracked in the 1303/04 range. To be sure, we have been range bound for most of the session, but the latest modest move down follows Reuters headlines that the Ministry of Finance will meet with FX dealers later today to discuss won weakness. An MoF official stated the won has been weakening at a faster pace compared to other currencies recently.

• The KRW NEER (J.P. Morgan Index) is down sharply for Feb so far, off around 4%, but we remain well above lows from last year (+8%).
• Rhetoric around FX weakness may reflect concern around a sharp move through the 1300 level in USD/KRW terms. As we noted earlier, the won is the worst performer in the region month to date amid equity and tech headwinds (see this link).
• Today's meeting is unlikely to change the fundamental direction of currency, but clearly official concern is rising. Late last week the MoF noted excessive volatility and herd behavior in FX markets. Yesterday BoK Governor Rhee stated the central bank will respond in a timely manner to unease in financial markets.