Home · Business · Sep 9 archive
South Korean Won: Gains seen moderating after sharp repricing
Developing
In Short: DBS Group Research’s Chang Wei Liang notes that the USD/KRW has fallen to around 1340 since late June, reflecting earlier optimism on the South Korean Won from a booming memory sector and strong investment plans.
However, he now expects further gains for the KRW to be more limited, as undervaluation has largely closed and the National Pension Service has suspended FX hedging.
This hawkish BoJ repricing continues to weigh on the USD/JPY pair and the USD, acting as a tailwind for the Japanese Yen, according to Fxstreet.
Background
The South Korean won, sometimes known as the Republic of Korea won, is the official currency of South Korea.
What's confirmed
- DBS Group Research’s Chang Wei Liang notes that USD/KRW has fallen toward 1340 in a steady decline since late June, reflecting earlier optimism on the Korean Won from a booming memory sector and strong investment plans.
- However, he now expects further KRW gains to be more limited as undervaluation has largely closed and the National Pension Service suspends FX hedging.
What's still developing
- However, it remains to be seen if Gold sustains its recovery momentum, as Oil prices remain elevated at seven-week highs, keeping inflation concerns and Fed rate hike bets alive.
- USD/JPY stabilizes above 153.50 during the Asian session on Thursday, but remains near a seven-month low set earlier this week as hawkish BoJ repricing continues to underpin the Japanese Yen.