USD/KRW: Won to rebound into year-end as current weakness is overdone – ANZ
|Lately, the Korean won has been fragile. Economists at ANZ Bank, however, expect KRW to bounce through the end of the year.
BoK to hike one more 25bp before year-end
“The won has been vulnerable to global growth concerns, given its diversified export base and high exposure to global demand. This is despite the Bank of Korea leading the region with the first rate hike in August, and we expect one more 25bp hike before year-end.”
“Export growth has stayed strong, but chip exports are seeing some signs of levelling off, which warrants a close watch. Also, after peaking in September 2020, the trade surplus has narrowed significantly.”
“We are wary that the KRW will remain volatile in the near-term, as the global growth outlook is clouded by the spread of the delta variant and signs of peaking in economic data in major economies. However, we see the weakness currently as overdone, and look for a rebound into year-end.”
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