KRW Weighed Down by Persistent Foreign Selling

The South Korean Won (KRW) remains under pressure due to persistent foreign selling of Korean equities, according to OCBC strategist Christopher Wong.

Foreign investors sold another KRW2.3tn of KOSPI shares on Thursday, taking cumulative selling to around KRW14tn over the past seven sessions, with large-cap technology names remaining at the centre of outflows.

The broader KOSPI has held up relatively well despite these outflows, but the external backdrop remains challenging, with elevated US yields post-FOMC continuing to weigh on the KRW.

Easing US yields, a softer Dollar, and lower Oil prices may temper further upside in USD/KRW near term, but a more sustained recovery in KRW probably requires foreign equity selling to slow, according to Wong.