Won Tad Firmer After CPI Beat

South Korea's CPI rose 4.1% Y/Y in March, printing slightly above the consensus forecast of +4.0%, reaching the fastest pace since 2011. FinMin Hong attributed the acceleration in price growth to the war in Ukraine and announced the expansion of oil tax cuts to provide some relief to citizens facing rising costs of living. Headline inflation has now stayed above the BoK's target of +2.0% Y/Y for 12 months in a row, ramping up pressure on policymakers to withdraw more stimulus. Note that the BoK is due to hold a monetary policy meeting on April 14 even as the Bank remains in a state of interregnum, with parliamentary hearings of Governor-nominee Rhee yet to conclude.

• The sister of North Korean Supreme Leader, who also sits on the Central Committee of the Workers' Party of Korea, said South Korea is not her country's "principal enemy" and Pyongyang will never deliver the first strike. At the same time, she rattled the nuclear sabre and warned that North Korea would not hesitate to use its unconventional arsenal if attacked.
• Spot USD/KRW trades at KRW1,213.75, just shy of neutral levels, with bears looking for losses past the 50-DMA at KRW1,208.63, followed by the 100-DMA at KRW1,197.52. Bulls would be pleased by a rebound above Mar 28 high of KRW1,227.30.
• USD/KRW 1-month NDF last seen at KRW1,214.15, a tad lower on the day. The 50-DMA at KRW1,210.80 provides the initial layer of support, with topside focus falling on Mar 28 high of KRW1,228.45.
• Looking ahead, South Korea's BoP current account data will be released on Friday.