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The USD/KRW exchange rate moved sideways on Thursday a investors reflected on the relatively weak economic numbers from the United States and South Korea. The pair was trading at 1,320, where it has been at in the past few days. This price is a few points below the year-to-date high of 1,344.
Weak US and South Korea data
The USD to South Korean won pair remained under pressure after a series of weak US economic numbers published this week. On Tuesday, data revealed that the American consumer confidence slipped in August after rising in the previous two straight months.
Another report by the Bureau of Labor Statistics (BLS) revealed that the country’s job vacancies dropped to the lowest level since 2021 in July. ADP said that the country’s non-farm private sector jobs came in at 177k in August, a sharp decline from the previous month’s 324k.
Further data revealed that the American economy expanded by 2.1% in Q2, lower than the previous estimate of 2.4%. US trade deficit also soared to over $91 billion in July.
Therefore, these numbers mean that the Federal Reserve will likely decide to pause its interest rate hikes in the upcoming meeting in September. The next key economic data from the US to watch will be personal consumer expenditure (PCE) and US non-farm payrolls (NFP).
As I wrote in this article, analysts expect that the headline PCE rose to 3.3% in July while core PCE jumped to 4.2%. They also expect the upcoming NFP data to reveal that the American labor market softened slightly in July.
The USD/KRW pair also reacted to another set of weak economic data from South Korea. According to the country’s statistics agency, industrial production dropped by 8% in July after falling by 5.9% in the previous month. This decline was steeper than the median estimate of 5.2%. South Korea’s retail sales dropped by 3.2% in July.
USD/KRW technical analysis
I recently wrote about the USD/KRW when South Korea published the weak exports and imports data. On the four-hour chart, we see that the USD to South Korean won has moved sideways in the past few days. In this period, it has moved slightly below the 25-period and 50-period moving averages.
The Relative Strength Index (RSI) has formed a bullish divergence pattern. Therefore, the pair will likely remain in this range in the coming days. The key support and resistance levels to watch will be 1,316 and 1,328.
The post USD/KRW: South Korean won wavers after weak retail sales data appeared first on Invezz.
