South Korea: BoK paused its tightening cycle in April – UOB

Pablo Piovano FXStreet

Economist at UOB Group Ho Woei Chen reviews the latest monetary policy meeting by the Bank of Korea (BoK).

Key Takeaways

“In line with consensus expectation, BOK maintained its rate pause in Apr as it kept its benchmark 7-day repo rate unchanged at 3.50% for the second consecutive month. The rate decision was unanimous unlike the previous meeting in Feb when one policy board member voted for a 25bps hike.”

“Similar to the Feb meeting, five board members continue to see the terminal interest rate at 3.75% while one member sees it more favourable for the terminal rate to be at the current 3.50%.”

“However, the case for a further rate hike has weakened and we continue to expect the BOK to remain on hold at 3.50% for the rest of 2023.”

“The BOK signals that there may be scope to further downgrade its growth forecast of 1.6% for this year (reviewed in Feb). It sees 2023 headline inflation to be consistent with the Feb forecast of 3.5% but core inflation may turn out to be higher than the Feb forecast of 3.0% and is expected at a level close to 3.0% by year-end.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.