South Korean Won: Appreciation may slow against US Dollar – OCBC

FXStreet Insights Team FXStreet

OCBC Bank strategists Sim Moh Siong and Christopher Wong observe that USD/KRW has consolidated after sharp declines over the past eight sessions, with exporter and month-end US Dollar (USD) selling offset by a firmer USD tone and foreign equity outflows. They suggest South Korean Won (KRW) support remains intact but the pace of appreciation may moderate, as focus turns to the Bank of Korea (BoK) meeting, US data, Jackson Hole and month-end flows.

KRW strength likely to consolidate

"USD/KRW consolidated overnight after trading sharply lower for most of the past 8 sessions."

"Exporter and month-end USD selling continued to provide support, but this was offset by a modestly firmer USD tone and sizeable foreign equity outflows (week-to-date -USD5.1bn). "

"The price action suggests that while the broader KRW support remains intact, the pace of the recent move may be showing tentative signs of moderation."

"Focus now turns to Thursday’s BoK meeting. Stronger growth and still-firm core inflation keep the case for further tightening alive, but the recent KRW appreciation and tighter financial conditions may also give policymakers some room to pause after July’s hike."

"Beyond the BoK, a busy US data calendar, Jackson Hole and month-end flows could also make for more two-way trading into the end of the week."

"USD/KRW last at 1384 levels. Daily momentum is flat while RSI is near oversold conditions. Some consolidation likely for now. Support at 1375, 1365 levels. Resistance at 1390, 1397 levels"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bulls regain control above 0.6950 amid USD retreat

AUD/USD regains traction and extends the previous day's bounce from the weekly low, aiming for 0.7000 in Asia on Friday. The overnight pullback in US bond yields keeps the US Dollar below an 18-month high, which in turn offers some support to the pair. Meanwhile, hawkish RBA expectations also keep the major underpinned.

USD/JPY holds gains near 158.00 after Japan's weak Household Spending data

USD/JPY clings to gains around 158.00 after data showed on Friday that Japan's Household Spending fell for the ninth straight month, undermining the Japanese Yen. Meanwhile, the US Dollar remains depressed as the overnight fall in US bond yields counters a hawkish Fed and geopolitical uncertainties, could cap any downside in the pair.

Gold remains range-bound below $4,200

Gold has given up some ground after an initial bullish attempt to reach weekly highs, returning to below the $4,200 mark per troy ounce on Friday. The US Dollar’s strong upside momentum, combined with rising US Treasury yields across the curve, seems to keep further gains in the yellow metal under scrutiny.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?

The Euro is not the sick man of Europe. France's bond market is

EUR/USD remains under pressure, near the 17-month low of 1.1161 reached on Monday. The pair has lost more than 7% since its yearly peak, as concerns over France's public finances increasingly weigh on the single currency. But behind the weakness of the Euro (EUR), the problem does not necessarily lie with the European economy as a whole.