USD/KRW Prints YtD Lows Despite Softer Yuan & Geopolitical Concerns

Spot USD/KRW dropped at the re-open, as last Friday's after-hours risk-on flows and South Korea's decision to ease coronavirus restrictions have outweighed geopolitical concerns on the Korean peninsula and the yuan's depreciation. The rate last deals -4.65 fig. at KRW1,148.75 and continues to operate at levels not seen since Apr 2019 after re-opening below its previous YtD trough.

• South Korea lowered its social distancing guidelines to the lowest level in its three-tier scheme after the daily count of new coronavirus cases has been printing at two-digit numbers for some time now.
• North Korea unveiled its new ICBM during Saturday's military parade to mark the 75th anniversary of the Worker's Party. The missile looked designed to deliver nuclear warheads, with some experts noting that it might be the largest road-mobile missile ever built.
• South Korea's exports declined 28.8% Y/Y in the first 10 days of the month, owing to the Chuseok holidays, but rose 2.8% when adjusted for the number of working days amid a 11.2% increase in chip shipments. Imports fell 19.5%.
• Bears look for further losses past Apr 15, 2019 low of KRW1,132.10, while bulls need to reclaim Oct 7 high of KRW1,165.95 to gain some reprieve and bring Sep 28 high of KRW1,174.80 into play.
• Highlights in South Korea this week include Wednesday's BoK MonPol decision (each of the 18 economists surveyed by BBG expects no change to the main policy rate) and Friday's unemployment.