Won Hits Lowest Since Oct. 2020 As Covid Cases Jump

The won has come under pressure despite robust employment data, markets choosing instead to focus on another spike in COVID-19 cases and tighter restrictions outside the capital. USD/KRW last up 5.60 at 1151.00, the highest since October 2020.

• The number of coronavirus infections continues to creep higher, in the past 24 hours there were 1,615 new cases which sets a new record high. The elevated figures have led the government to announce it will elevate the social distancing scheme in regions outside the greater Seoul up one notch to level 2 meaning private gatherings of more than four people are banned. The restrictions will apply to Incheon and Gyeonggi Province from Thursday. The vaccination drive has stalled, the government suspended vaccination reservations for 55-59 year olds due to a lack of inoculations.
• South Korean unemployment rate drops to 3.7% in June against expectations of 3.8%, the fourth straight month of adding jobs. However, the momentum may have been lost as a surge in coronavirus cases from late June saw stricter lockdown measures imposed. The outlook for the labour market is likely to be a focal point of discussion when the BoK meets later this week. Elsewhere other data showed South Korea's export prices rose in June, marking the seventh straight monthly gain amid a robust recovery in exports. The Export price index rose 12.7% Y/Y, while the import price index rose 14.0%. Bank lending to households will be released later in the session.