USDKRW trades just off daily highs up....>

KOREAN WON: USDKRW trades just off daily highs up 0.4% on the day at 1124.0 as

the pair trades virtually in lockstep with broader global dollar movements amid

a lack of data out of Asian markets this week. The won has also resumed its

positive correlation with the yen with the pair moving towards the lower end of

its choppy trend channel. 

- USDKRW is decoupling from implied volatility as well as CDS spreads, both of

which continue to head towards fresh cycle lows reflecting the increasingly

stable nature of the currency. 

- Recent won weakness has also come despite a narrowing of US-Korea real swap

rate differentials, which have moved lower from extreme levels but still suggest

USDKRW should be trading higher medium term.