Won Weaker Despite Positive Covid Developments

USD/KRW is higher in Asia trade on Thursday, last up 3.50 at 1089.20. Earlier in the session South Korean Vice Finance Minister Kim Yongbeom said the country will try to achieve a speedy and strong economic recovery while closely monitoring financial market risk factors and possible increase in market volatility. He added South Korea will help provide support measures for exports, which are helping to sustain hope for an economic recovery.

• The latest flow data is mixed. Foreign funds bought a net $308.4m in bonds yesterday, and were net sellers of equities to the tune of $457.6m.
• Measures to contain the pandemic seem to be having the desired effect. There were 870 new coronavirus cases over the last 24 hours, below 1,000 for a 3rd day, the longest run in almost 4 weeks.
• USD/KRW has receded from resistance at 1090, we were last over this level on Dec 30 2020, and the 38.2% retracement from the Dec high at 1091.89. Above this 1095 is the key challenge for bulls and Nov/Dec high of 1110 could come into play. Support is seen at the cycle low of 1080 hit on Dec 4, Dec 9 and Jan 4.