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USDKRW opened strong and added to........>

KOREAN WON
KOREAN WON: USDKRW opened strong and added to gains after trading resumed
following yesterday's holiday. The pair is trading just off its daily highs at
1128.0 as a bull flag appears to be forming signaling further medium-term gains.
- Won weakness today comes even as Korean interest rate swaps are up 3.8bps to a
new two-month high at 1.9975%, as higher US yields keep the US-Korea real yield
spread elevated.
- We have been calling for a leg higher in USDKRW over recent weeks due to the
widening yield spread between the US and Korea, and the pair faces additional
upside risks from the resumption of euro weakness.
- We continue to see USDKRW as being ~8% lower than where historical
correlations with real yield spreads suggest it should be trading.  

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