Won Weakens As Virus Cases Hit Record

The won is sharply weaker at the open, USD/KRW up 4.35 at 1154.55. The weakness has been attributed to a spike in coronavirus cases; after hovering around 1,300 earlier this week cases hit a fresh record high of 1,896 in the past 24 hours- authorities did warn yesterday that case numbers in the current wave had not yet peaked.

• As a reminder South Korea extended the highest distancing measures of Level 4 in the Seoul metropolitan area for another two weeks through Aug. 8 and will also enforced Level 3 distancing restrictions in the non-capital areas through Aug. 8, though some municipalities have adopted Level 4 measures to better contain the virus. The PM spoke earlier and said that Moderna vaccine supply would resume next week, which comes after supply issues were reported earlier this week.
• South Korean equity markets have opened slightly lower alongside other markets in the region as the recent China selloff leaves participants cautious.
• Elsewhere, Finance Minister Hong said the government had made it a priority to stabilize the housing market and would do so through expanding home supplies. The government also urged citizens to be prudent.
• The IMF sharply raised its 2021 growth outlook for South Korea to 4.3% as the economy is on a solid recovery track amid robust exports. It follows a slight miss in GDP data earlier this week, though the BoK reassured markets that the economy was still on track to grow 4% this year, the BoK's forecast.