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USD/KRW Off Highs As FinMin Warns Of Excessive Won Volatility/Herd Behavior


1 month USD/KRW sits slightly below intra-day highs, the pair was last at 1298/99, we got above 1302 earlier. Some pull back has likely been on account of the Finance Ministry official stating the won's volatility was excessive and that this likely was due to herd behavior in FX markets.

  • Such statements are often made when South Korean officials are concerned about the pace of won moves. For instance, the BoK Governor stated on the 24th of Oct last year the authorities were working to curb herd behavior in currency markets (USD/KRW was close to 1450 at the time).
  • USD/KRW 1 month is close to +7% from its early Feb lows. Such a rapid move from sub 1220 to 1300 may have prompted today's remarks.
  • It doesn't necessarily mean a line in the sand from a USD/KRW standpoint, but the authorities may step up jaw boning (or official intervention) to slow the rate of won losses.

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