USD/KRW will end this year at 1,320.0 — MUFG

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MUFG Bank analysts note that the stress on the Korean won is unlikely to abate any time soon. They expect USD/KRW to hit 1330.0 by the end of the first quarter of next year and 1270.0 twelve months from now.

Notable Statements:

“The won appreciated last month on improving risk sentiment spurred by the prospect of a slower pace of Fed rate hikes. KRW performance was consistent with the benchmark KOSPI index, which rose more than 7 %, and with foreign investors’ net purchases of $2 billion worth of Korean stocks in the month.”

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“In terms of data, South Korea’s current account balance moved to a surplus of $1.61 billion in September, after a deficit of $3.05 billion in August; the country’s unemployment rate was lower than expected. expected (2.8% in November vs. 2.9% Bloomberg) and continued efforts to stabilize its credit market helped boost sentiment That said, its latest economic indicators continue to point to weakness ahead Early exports of South Korea (first 20 days) contracted for the third consecutive month in November, indicating the risk to a trade-dependent part of the economy amid weakening external demand.”

“Slowing growth and a possible strengthening of the dollar in the coming quarter imply a slightly weaker KRW. We expect USD/KRW to end this year at 1,320.0.”

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Source: Fx Street

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