Won Falters As Pyongyang Tests Missiles, Seoul Fears Covid Infections During Chuseok Holiday

Spot USD/KRW trades +5.00 fig. at KRW1,174.10, hitting best levels since late August. Bulls need a clearance of Aug 20 high of KRW1,181.10 to get some further momentum. Bears look for a dip through the 50-DMA at KRW1,155.56 towards Sep 6 low of KRW1,154.00.

• USD/KRW 1-month NDF last seen +3.65 fig. at KRW1,174.85. A break above Aug 20 high of KRW1,184.78 would represent a significant bullish development, while bears keep an eye on the 50-DMA at KRW1,156.59, followed by Sep 3 low of KRW1,153.05.
• The country's daily Covid-19 case count fell under 1,500 today, albeit the number of tests was also lower. The authorities are preparing for the Chuseok holiday which will begin this weekend, lasting through next Wednesday. Typically, tens of millions of South Koreans use these holidays to travel across the country.
• Meanwhile, North Korea said that it successfully test-launched "new-type, long-range" cruise missiles over the weekend. If the range reported by Pyongyang was true, the missiles would be able to reach targets in most of Japan.
• South Korea's daily average exports rose 30.7% Y/Y in the first 10 days of the month. Chip exports shrank 2.1%, while imports surged 60.6%.
• Looking ahead, terms of trade will be published tomorrow, while unemployment will hit the wires on Wednesday.