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USD/KRW Lower On Samsung Earnings Beat, Current Account Back Into Strong Surplus

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Friday trade has started with spot USD/KRW on a softer footing. The pair was last near 1379.5, around 0.10% stronger in won terms (we ended extended Thursday trade at 1381.05). Earlier lows were just under 1378. The 1 month USD/KRW is also lower, near 1377.

  • Early positive impetus is coming from the stronger local equity tone. The Kospi is up 0.60%, leaving the index at fresh highs back to early 2022. An earlier Samsung profit beat for the tech bellwether is aiding local stock optimism.
  • The chart below plots USD/KRW (which is inverted on the chart), against the Kospi index. While there is decent levels wedge between the two series, a degree of direction correlation remains.
  • For spot USD/KRW downside focus is likely to rest on a potential test of 1373.23, which is the 50-day EMA support zone. We are sub the 20-day (near 1381). Highs so far in July rest just under 1392.
  • Earlier data showed a strong goods balance surplus for May, while the current account surplus rose to above $8.9bn, fresh highs back to Q3 2021. The sharp swing back into surplus for investment income (after April's dividend related outflows caused a deficit) but a clear positive.

Fig 1: USD/KRW (Inverted) Versus Kospi Equity Index

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Friday trade has started with spot USD/KRW on a softer footing. The pair was last near 1379.5, around 0.10% stronger in won terms (we ended extended Thursday trade at 1381.05). Earlier lows were just under 1378. The 1 month USD/KRW is also lower, near 1377.

  • Early positive impetus is coming from the stronger local equity tone. The Kospi is up 0.60%, leaving the index at fresh highs back to early 2022. An earlier Samsung profit beat for the tech bellwether is aiding local stock optimism.
  • The chart below plots USD/KRW (which is inverted on the chart), against the Kospi index. While there is decent levels wedge between the two series, a degree of direction correlation remains.
  • For spot USD/KRW downside focus is likely to rest on a potential test of 1373.23, which is the 50-day EMA support zone. We are sub the 20-day (near 1381). Highs so far in July rest just under 1392.
  • Earlier data showed a strong goods balance surplus for May, while the current account surplus rose to above $8.9bn, fresh highs back to Q3 2021. The sharp swing back into surplus for investment income (after April's dividend related outflows caused a deficit) but a clear positive.

Fig 1: USD/KRW (Inverted) Versus Kospi Equity Index

Keep reading...Show less