Won Continues To Strengthen As Kospi Heads For Another Record Close

USD/KRW taking another leg lower, last at 1084.95, down around 1.05% on the session and 1.45% in the last two days.

• The Kospi index has risen to end the week, hitting 2,741 and set for the fourth consecutive record close. The increase has been driven by foreign inflows; foreign investors purchased a net KRW 484bn of Kospi stocks by the middle of the session according to Bloomberg data.
• The won is now set for the fifth straight week of gains against the US dollar. This persistent gain has sparked rumours among traders of Bank of Korea intervention in the local currency as the economic recovery is dependent on exports.
• The currency has gained almost 7% in Q4, but this does not seem to have had too much of an impact on exporters yet, with data earlier in the session showing largest current-account surplus since September 2017.
• Bank of Korea Governor said at the policy meeting in November the bank would step in to curb herd behaviour in FX, but did note that appreciation appears to be having less of an impact on export performance than in the past.