Chart Book | Chart of the day: Sentiment turns sour for won

Sentiment towards Asian equities has broadly weakened over the past two weeks. In the case of the Korea Composite Index, which is down 2 per cent from its high in late July, its recent consolidation has chimed with currency developments, which have seen the won weaken against the US dollar. A break above resistance at about 1,050 to the dollar would mark an important swing towards the greenback, clearing the way of resistance for a potential move to retest 1,085. It would also mark an important inflection point from a sentiment perspective, given our dollar-won indicator is on the cusp of a move from a negative to a positive-dollar sentiment condition. This may have implications for near-term prospects for the Korean equity market.