KRW: BoK FX intervention odds low in the midst of US-South Korea trade talks - ING
|The won sold-off sharply after it was reported that the Korean government are looking to intervene against one-sided FX moves, points out Viraj Patel, Research Analyst at ING.
Key Quotes
“While this highlights the well-known aversion of policymakers to currency strength, we think neither verbal nor active leaning against the wind intervention will prove effective in stopping the trend of KRW appreciation. In addition to ongoing portfolio inflows amid a backdrop of low inflation, gently rising BoK policy rates and reduced geopolitical risks – we note that the probability of any immediate large-scale intervention to offset KRW strength is very low, especially as officials begin to renegotiate the 2012 US-South Korea free trade deal (KORUS). This factor, in particular, means that USD/KRW should resume its downward trend following today's positioning adjustment and we continue to eye an extensive KRW rally to the 1000 level.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.