Won Sinks Under Pressure From Consequences Of Russian Invasion

The Russian aggression against Ukraine and Western response with targeted sanction has fuelled stagflation fears. Talk of the U.S. considering a ban on Russian oil imports (in coordination with allies, with the option of acting unilaterally) has rattled markets at the start to the new week. South Korean won took a beating from the combination of broader risk aversion & soaring oil prices.

• Spot USD/KRW trades +12.15 figs at KRW1,226.30, printing levels last seen in mid-2020. Bulls look to a further rally towards May 25, 2020 high of KRW1,244.25, while bears keep an eye on Feb 28/Jan 28 highs of KRW1,208.30/1,207.25.
• USD/KRW 1-month NDF last +9.45 figs at KRW1,227.42. Topside focus falls on May 25, 2020 high of KRW1,244.46, while bears see Jan 28 high of KRW1,214.39 as their initial target.
• South Korean FX policy authorities said they are monitoring markets for signs of speculative moves or excessive anxiety.
• East European headlines may have diverted attention from North Korea's latest apparent missile test. Pyongyang test-fired a projectile into the East Sea Saturday in its ninth such drill this year, while Seoul said that the UN Security Council plans to discuss the matter this week.
• Focus turns to South Korea's BoP current account balance, coming up this Friday.