USDKRW is struggling to push above.......>

KOREAN WON: USDKRW is struggling to push above 1,120, dropping hard off this

resistance level early today, to trade at 1,117.60 currently. With the RSI

showing bearish divergence some stalling in the dollar bull run seems likely at

the least. 

- Fundamentally, though, real and nominal rate expectations between Korea and

the US continue to diverge in favour of the greenback. Furthermore, CDS spreads

in Korea are also picking up amid signs of risk-off sentiment globally. Higher

CDS spreads would require higher Korean real rates to prevent won weakness,

adding another element of risk to the currency which remains overvalued based on

the historical correlation with risk-adjusted real yields.