USD/KRW has rallied strongly from the low this morning of 1126.23 to a high of 1136.33 on reports of heavy BOK intervention. BOK bids picked up after BOK left rates unchanged as widely expected at 2% along with a cautious tone, giving few hints that the political pressure to leave rates low is waning. Outgoing BOK Governor Lee noted the uncertain economic outlook but at the same time, expects an ongoing recovery and sees inflation on a stable trend to around 2.5-3% by year-end, a conservative outlook given that Feb inflation was already at 2.7% y/y. USD/KRW has eased back to 1133.60. Kospi has given up early gains, down -0.1% which should aid BOK's efforts. Overall, given the strong data out of China, ongoing recovery in the region is the baseline scenario. Sell upticks is the longer term bias but near term, BOK action may help it stay within the 1126-1140 range near term.
