Published at 01:41 (GMT) 02 Sep
EMGA KRW FX FLOWS: USD/KRW touches 1011.1; Aug CPI eases to 1.4%y/y
Headline CPI in Aug grew by 1.4%y/y, the slowest rate since Mar 2014. Overall prices were dragged by transportation sector prices which declined at the fastest pace since May 2013. So far this year, inflation has averaged 1.4%y/y, well below central bank's target range of between 2.5 - 3.5%y/y.
Meanwhile, core inflation (ex food and fuel) continued to trend higher as prices grew by 2.35%y/y the fastest pace since Feb 2012.
In the breakdown, housing, water, electricity, gas and other fuels (contribute the most to CPI) inflation eased to 2.65%y/y, the slowest rate seen since Dec 2010. Food and beverages inflation was back into red as prices declined -0.45%y/y in Aug from 1.06%y/y rise in Jul. Meanwhile, food prices contracted 0.56%y/y from 1.07%y/y growth in Jul. Meanwhile, lower oil prices fed into transportation, where prices declined by 1.86%y/y.
On FX, USD/KRW declined to 1011.1, lows not see since 10 Jul, prices bounced a tad but were unable to touch back 1014.0. Prices last seen trading 1013.4 - 1013.7. Focus on immediate support at 1010.3 ahead of the stronger support at 1008.4, lows seen on 4 Jul and where a break will expose the next stronger support at 1005.1, 28 Jul 2008 lows. JPY/KRW declined to fresh 6-yr lows of below 9.700 as USD/JPY climbed above 104.500, touching 7-m highs. KOSPI trading in moderate gains down 0.6% at last check. BB
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