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Won Rallies Amid Tech Equity Optimism

KRW

1 month USD/KRW continued to track lower post the Asia close. We got to 1332/33 by the NY close, a 0.63% gain in won terms for Wednesday. Note onshore spot finished yesterday at 1337.60. For the 1-month NDF, the simple 200-day MA sits just above 1327, so this could be a downside target for USD bears.

  • The won benefited from tech related equity outperformance, with the SOX rising nearly 2.50% for Wednesday's session, while the MSCI IT gained 1.18%, which was more in line with broader equity shifts.
  • To recap, yesterday saw $295mn flow into South Korea equities, while the Kospi gained 0.58%. Note +$625.7mn was moved into Taiwan equities, amid renewed tech optimism. Closer ties/investment with Japan is one positive, the other was optimism around Apple iPhone 15 demand (see this link). This likely drove some positive spill over to Korean related assets.
  • The data calendar is quiet today. The Industry Ministry will reportedly release measures to boost competitiveness in the display industry, while the Energy Ministry will meet to discuss power the demand/supply outlook for the summer months.

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