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USD/KRW Uptrend Intact, Any Dovish Shift By The BoK Next Week May Weigh On The Won

KRW

Spot USD/KRW has steadied as the Thursday session has progressed. We were last near 1382, still around 0.30% firmer in won terms. This leaves us close to the 20-day EMA, while the broader technical backdrop still remains positive from a dollar standpoint. Since mid May spot USD/KRW has generally printed higher lows. Resistance in the 1390/1400 region is still apparent on the topside.

  • Outside of broader risk sentiment shifts, the focus for the won next week will be on the BoK decision. The consensus looks for no change (steady at 3.50%), although onshore there have been more calls for easier policy settings from local politicians.
  • Note local media is reporting that BoK Governor Rhee will address parliament on July 9 (next Tuesday), two days before the BOK decision, with Rhee reportedly set to speak about monetary policy (see this link , Yonhap Infomax).
  • Market pricing for an easing in H2 has risen post this week's softer CPI print.
  • Even without a surprise result next week, a dovish BoK shift next week could weigh on KRW all else equal. We have seen in recent weeks/months PHP weighed by the central bank's language around likelihood of easing (potentially at the August BSP meeting).
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Spot USD/KRW has steadied as the Thursday session has progressed. We were last near 1382, still around 0.30% firmer in won terms. This leaves us close to the 20-day EMA, while the broader technical backdrop still remains positive from a dollar standpoint. Since mid May spot USD/KRW has generally printed higher lows. Resistance in the 1390/1400 region is still apparent on the topside.

  • Outside of broader risk sentiment shifts, the focus for the won next week will be on the BoK decision. The consensus looks for no change (steady at 3.50%), although onshore there have been more calls for easier policy settings from local politicians.
  • Note local media is reporting that BoK Governor Rhee will address parliament on July 9 (next Tuesday), two days before the BOK decision, with Rhee reportedly set to speak about monetary policy (see this link , Yonhap Infomax).
  • Market pricing for an easing in H2 has risen post this week's softer CPI print.
  • Even without a surprise result next week, a dovish BoK shift next week could weigh on KRW all else equal. We have seen in recent weeks/months PHP weighed by the central bank's language around likelihood of easing (potentially at the August BSP meeting).