Won Struck By Risk Aversion, Domestic Covid Angst, Despite Strong Samsung Earnings

Spot USD/KRW reopened on a firmer footing and last deals +6.55 figs at KRW1,136.30. Overnight risk aversion and domestic Covid-19 worry have applied some pressure to the won, which may have been partly mitigated by stronger than expected Samsung Q2 earnings reported this morning.

• South Korea's daily Covid-19 case count topped 1,000 for the first time since in half a year, amid a spike in infections in the Seoul metropolitan area. PM Kim said that the gov't will keep current social distancing measure for now, but may look into strengthening them.
• South Korea's BoP current account surplus expanded to $10.7612bn in May from April's $1.9099bn.
• Samsung reported a Q2 operating profit of KRW12.5tn, which beat estimates of KRW11.0tn. The company attributed strong earnings to a one-off gain in its display business.
• Bulls look for a rally above Jun 21 high of KRW1,138.90, a four-month high. Above there opens Mar 10 high of KRW1,145.20. Bears look for a retreat under Jun 25 low of KRW1,125.55.
• USD/KRW 1-month NDF sits -0.94 figs at KRW1,136.60. A fall through Jun 25 low of KRW1,123.60 would provide an important bearish signal, while bulls look for a clearance of yesterday's multi-month high of KRW1,139.32, followed by Mar 10 high of KRW1,144.93.