South Korea and the United States (US) released a joint statement on a foreign exchange policy agreement on Wednesday.

Key takeaways

South Korea, US agree to avoid manipulating exchange rates to gain unfair competitive advantage.

South Korea, US agree any macroprudential, capital flow measures will not target exchange rates - joint statement

South Korea, US to exchange fxFX intervention operations on monthly basis.

South Korea, US agree FX market intervention should be reserved for combating excessive volatility and would be considered for both disorderly depreciation and appreciation.

The joint statement does not mention bilateral currency swap, South Korea's state-run pension fund.

South Korean won erases early gains to turn lower after FX agreement with the US.

Market reaction

The South Korean Won (KRW) erased early gains to turn south after FX agreement with the US, with USD/KRW spiking from 1,402.50 to as high as 1,409.45 in the last hour. The pair is up 0.20% on the day, as of writing.