Analysts at CIBC, forecast the USD/KRW at 1175 during the first quarter of next year and at 1160 in the third quarter.
Key Quotes:
“The South Korean economy has been amongst the hardest hit by the US-China trade war, with exports having fallen in every month of this year. The hi-beta nature of the South Korean economy to China, and to global risk more generally, has been a weight on the KRW through most of the year. That’s left the KRW as the weakest Asian currency against the USD this year, currently off by 4.5%. But now that we see a calming in tensions via the Phase One deal, we expect to see at least some stabilization and likely a recovery of trade flows into 2020. That should provide subsequent support for the economy and the KRW.”
“Support will also likely come via GDP growth, as it appears to have bottomed out in 2019, with the outlook for a return to moderate growth in the mid-2% range. The BoK’s easing of policy (50 bps in 2019, to 1.25%) has been positive for underpinning domestic activity. As such, we look for rates to remain on hold throughout next year.”
Share
