Won Gains Despite Bounce In South Korea's Daily Covid Cases

Spot USD/KRW has lost some ground after the re-open and last trades -1.05 fig at KRW1,187.05. The rate has been finding support at/just above Dec 24 low of KRW1,185.20 over the recent days. A break here would open up Dec 17 low of KRW1,180.60. Conversely, a jump above Dec 22 high of KRW1,192.80 would bring Nov 29 high of KRW1,195.70 into view.

• USD/KRW 1-month NDF last seen at KRW1,187.93, marginally below neutral levels. A fall through Dec 17 low/100-DMA at KRW1,180.25/1,179.60 would please bears, while bulls look to a break above Dec 21 high of KRW1,194.36.
• South Korea's daily Covid-19 cases fell below 4,000 for the first time in almost a month on Tuesday but then jumped to 5,409 today. Data from this morning also showed that the number of critical cases jumped to a new all-time high.
• Sentiment among South Korean manufacturers rose to 92 from 88 in the latest BoK Business Survey, but the index tracking non-manufacturers' confidence slipped to 78 from 83. Both main gauges stayed below the breakeven level of 100.
• A gov't adviser said in an interview last week (although his comments only got some broader airing today) that South Korea should allow offshore won trading to make the current system more efficient for foreign investors. These remarks come as the Finance Ministry is preparing a revamp of rules on FX transactions planned for next year.
• Focus moves to domestic industrial output data (Thursday) and CPI (Friday).