Won Strengthens Despite Uptick In COVID-19 Numbers

The won is stronger, USD/KRW down around 2.55 at 1117.15 declining from the open as markets play catch up with greenback weakness in the overnight session. The decline from March highs (1145) to current levels brings the Feb 27 opening gap into play, potentially clearing the way for a move down to 1108.

• South Korea reported 668 more COVID-19 cases in the past 24 hours, a sharp rise from 478 the previous day and the largest since 621 daily infections on Feb. 18. The daily caseload had been hovering above 500 since Wednesday last week, before falling to 473 on Monday due to fewer COVID-19 tests over the weekend. Authorities have warned that the country may see the daily caseload of over 600 amid increased spring travel and loosened vigilance against the virus, signaling that enhanced virus curbs may be adopted to stem the further spread of COVID-19. Local authorities plan to release new social distancing guidelines, which will be implemented starting next week.
• Data earlier showed the February current-account surplus at $8.03bn from $7.06bn in January, goods trade surplus at $6.05b in Feb. from $5.73b surplus for Jan, while the services surplus at $129.8m in Feb. compared to a deficit of $606.3m in Jan.
• Elsewhere, Samsung Electronics reported earnings above estimates for Q1, the company reported a 44% rise in Q1 profit, while operating income at KRW 9.3tn was above estimates of KRW 8.8tn. Samsung did initially warn that Q1 could be weak, but strong demand for electronics buoyed the earnings report.
• Looking ahead, Seoul and Busan, South Korea's two largest cities, will hold mayoral by-elections. President Moon's ruling Democratic Party could be headed for defeat in what would be a troubling signal for his government.