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USD/KRW Soars Past KRW1,400, Off'ls Warn Against One-Sided Moves


Spot USD/KRW cracked above the KRW1,400 mark for the first time since 2009 after the Fed raised interest rates by 75bp and reaffirmed its intention to keep tightening monetary conditions aggressively until inflation is contained. The pair last operates at KRW1,406.15, up ~11 figs on the day, with bulls setting their sights on Mar 31, 2009 high of KRW1,423.00 Bears keep an eye on Sep 19 low of KRW1,383.55.

  • USD/KRW 1-Month NDF last +9.60 figs at KRW1,405.90, with topside focus falling on Mar 31, 2009 high of KRW1,420.85. Bears look for a retreat under Sep 16 low of KRW1,380.92.
  • Post-Fed slump in the won prompted renewed verbal interventions by South Korean officials, as FinMin Choo vowed to mobilise all steps possible on FX on one-sided moves and warned that financial & FX market uncertainty may continue.
  • BoK Gov Rhee said the central bank will determine the extent of its rate hike next month after assessing the impact of the Fed's policy adjustment on FX markets, adding that inflation remains top priority.
  • The won has been the worst performer in emerging Asia this year, losing ~15% against the greenback as the Fed engaged in an aggressive tightening campaign to bring princes under control.
  • South Korean equity indices are struggling (KOSPI -1.1%, KOSDAQ -1.5%) as post-FOMC impetus keeps risk assets under pressure.
  • The BoK will publish its financial stability report later today.

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