USDKRW trades at its daily high at.......>

KOREAN WON: USDKRW trades at its daily high at 1118.15 as the gap at 1120.00

comes into focus. Above here would mark a bullish shift in the short-term

outlook, opening the Sep 18 high at 1130.25.

- A number of factors are aligned for a move higher such as the rally in the

dollar against the majors and the drop in Korean stocks, which are trading back

below resistance-turned-support at their Aug 31 highs.

- While rising Korean rate expectation provide some support for the won, the

real rate spread with the US remains negative and suggests USDKRW should be ~10%

higher than current levels. The BOK would have to embark on a major hiking

cycle, or the Fed would have to reverse its hiking cycle, in order to prevent

further medium-term USDKRW upside.