USDKRW has held onto its early gains and......>

KOREA: USDKRW has held onto its early gains and remains up 0.8% on the day, last

at 1114.0. A close around here would suggest a potential bullish reversal. The

pair is trading in line with global risk appetite today's won weakness coming in

line with a 0.6% drop in the Kospi. Interest rate swaps have also reversed most

of Monday's risk-on gains, down 2.3bps at 1.9050%. 

- The won continues to trade at very rich levels compared with the Kospi, with

the KRW's real effective exchange rate near multi-year highs and the Kospi's

valuations near multi-year lows. It will be interesting to see if a reversal in

won strength puts any upside pressure on Korean stocks.