Won Weakens Despite Robust Data

The won is weaker on Wednesday, USD/KRW gapping higher at the open after a rebound in the greenback. USD/KRW last up 4.60 at 1116.95. The rate is sandwiched between its 100-day moving average at 1111.00 and the 50-day moving average at 1122.47.

• Data earlier in the session showed exports continue to surge, rising 45.4% in the first 20 days of April, while chip exports rose 38.2%. In general, all categories had a strong showing, exports of cars, mobile tech and petrol products all up by more than 50%.
• Earlier in the session PPI showed a decent rise, up 3.95% in March from a 2.1% rise in February, the print is positive for a fifth straight month. CPI rose 1.5% in March, still below the BoK's target of 2.00%.
• Some worry on the coronavirus front as South Korea's daily new coronavirus cases bounced back to over 700 Wednesday as the country is teetering on the brink of facing another wave of the pandemic. There were 731 new cases in the past 24 hours, up from 549 on Tuesday. Elsewhere, South Korea is considering a "vaccine swap" agreement with the US that would effectively function as a loan deal in which the country receives surplus COVID-19 vaccines from the US and gives the same amount back later.
• Meanwhile, Finance Minister Hong said the government is guarding against potential instability in the housing market as home prices in Seoul picked up amid expectations for eased rules on redevelopment housing projects. The minister also said the government plans to unveil measures next month to overhaul the Korea Land and Housing Corp., the public housing developer at the center of a land speculation scandal involving public officials. "The government remains firmly wary of the possibility that the housing market could become unstable again," Hong said at a pan-government meeting on housing policy.