USD/KRW traded a whopping 1224-1277 range in Asia today. The market was already well bid around 1246 when North Korean leader Kim Jong-il put the country on a combat footing. We got a surge above 1270 whilst the local bourse was down over 4% at one stage. The BOK (central bank) intervened aggressively forcing USD/KRW back to 1250 – amounts of intervention done vary but there is talk up to $5bln.
You might be saying why should I be worried about the Korean Won – well when the BOK intervenes to sell US Dollars to protect the local currency they also have to sell EURO to keep their reserve holdings at appropriate levels. So if you hear the BOK is selling Euro”s today……………get out of the way.
