Won Higher After Drop Yesterday

The won is higher in early trade, USD/KRW tracking moves lower in the greenback. The pair closed on session highs just above 1108 yesterday.

• There could be some headwinds for the won today with South Korea reporting 561 coronavirus cases in the past 24 hours, down slightly from yesterday where cases were above 600 for the second day, but still above the 400 threshold that is said to be a concern for policymakers. Clusters of infections at factories and hospitals in the wider Seoul area have caused concerns of a potential resurgence, especially after social distancing rules were eased for small shops on Monday.
• Data released pre-market showed January PPI rose 0.8% Y/Y in January, against a 0.2% rise in December. The gains were driven by a 7.0% M/M increase in agriculture, forestry and marine products, manufacturing products rose 1% while electric, water and gas index fell 1.2%
• Looking ahead Q4 external debt data is due at 0200GMT/1000KST, while there could be comments from the finance minister after he attends a parliament session at 0300GMT/1100KST.