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USD/KRW Stops Short OF 50-day EMA Downside Test, Data Outcomes Mixed


1 month USD/KRW sits up off earlier lows, last near 1328.5. We got to just under 1326 not long after the onshore open, but couldn't test the 50-day EMA, slightly sub this level. The won is still around 0.15% firmer versus levels at the end of last week. Onshore spot is close to 1330.60, only mildly stronger in won terms for the session.

  • The early positive impetus for the won came from the strong open in terms of local equities, which are still up over 1%. We haven't been able to breach the 2700 level for the Kospi yet though. Offshore buying is positive in the first part of trade.
  • Still, the won's beta with respect to local equity moves has not been that strong of late. Sell-side names have noted the strong domestic capital outflows as playing an important offset.
  • On the data front, Jan IP figures were mixed, down in m/m terms (-1.3%, versus +0.9% forecast), but the y/y was +12.9% (+10% forecast). Seasonality, along with weaker chips production, reportedly played a role in the m/m dip, but the y/y trend looks firm. Other data showed retail sales down 3.4% y/y, while facilities investment fell 5.6% m/m. Construction investment rose though, +12.4% m/m.
  • The Feb PMI printed at 50.7, versus 51.2 in Jan, so down slightly, but still in the expansion zone.

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