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USD/KRW Just Shy Of Cyclical Highs, As CNH Plunge Offsets Better Equity Tone

KRW

The 1-month USD/KRW drew selling interest above 1445 overnight, which is not too far from recent cyclical highs around 1447. Onshore spot finished yesterday at 1439.60. Given we are close to recent highs, rhetoric from the authorities may pick up today around FX levels.

  • Equity sentiment remains positive, with further gains in tech sectors overnight. The SOX up 0.64%, while the MSCI Tech gained 1.40%. To recap, the Kospi rose 1% yesterday, with offshore investors adding +$180.2mn to local shares.
  • The won is not benefiting from these trends, as fresh record lows in CNH provide an offset.
  • Earlier, October consumer confidence fell to 88.8 from 91.4 in September. Inflation expectations edged back up to 4.3% from 4.2% previously. We remain below July highs though, which came in at 4.7%.
  • Tomorrow, manufacturing and non-manufacturing sentiment measures print, the chart below plots the manufacturing trend against consumer sentiment.
  • Also note President Yoon will deliver a speech today to the National Assembly on the 2023 budget proposal.

Fig 1: South Korea Consumer & Manufacturing Sentiment Trends

Source: MNI - Market News/Bloomberg

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