Won Hit Lower Again

The won weakened sharply at the open, pressured by the global risk off trade on Monday. The pair last up 4.55 at 1152.25, the highest since October 2020 and closing the opening gap from October 8. Bulls look for consolidation above the 1150 level before targeting a 38.2% retracement at 1163.00. Support is seen at a 23.6% retracement at 1131.00.

• On the coronavirus front South Korea reported 1,278 new cases in the past 24 hours, in the 1,200s for the second consecutive day due to fewer tests amid scorching hot weather, as authorities are tightening their guard against the fast spread of the highly contagious delta variant across the nation.
• Late yesterday Finance Minister Hong said the government will consider the dispersal of more relief funds to small merchants hit by the pandemic under its proposed extra budget. The fourth wave of the pandemic has spurred calls to revise a proposed extra budget of KRW 33tn as the toughest virus curbs so far will likely cause more damage to the self-employed. Hong ordered finance ministry officials to draw up measures to increase support to the pandemic-hit merchants under the proposed supplementary budget scheme.
• Elsewhere, South Korean Pres Moon will not be meeting with PM Suga after all. Moon cancelled his plans to visit Tokyo this week after a Japanese diplomat lashed out at him, using highly offensive terms.
• A quick mention for government data yesterday which showed number of discouraged workers in South Korea hit a new monthly high of 583k in June amid the prolonged coronavirus pandemic while corporate direct financing rose 34.2% in the first half from a year ago due to a robust rise in sales of bonds and stocks.