South Korea's FX Swap Points Rise Across All Tenors on Rate Hike Bets

According to Yonhapnews, on July 22, South Korea's FX swap points rose across all tenors as market participants braced for a consecutive Bank of Korea rate hike in August. The 1-year swap point closed at minus 13.80 won, up 0.20 won from opening, while the 6-month, 3-month, and 1-month tenors rose 0.10 won each to minus 6.90, minus 2.95, and minus 0.70 won, respectively. Market focus centered on domestic monetary policy expectations, with growing anticipation that Q2 GDP growth may exceed consensus forecasts. A bank swap dealer noted the upward pressure reflects pre-pricing of a potential August rate increase should GDP surprise to the upside, similar to Q1.
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