In UOB Group’s Quarterly Global Outlook, FX Strategists believe the Korean currency could appreciate by year-end/early 2021.
Key Quotes
“While the COVID-19 outbreak is showing early signs of coming under control in South Korea, it will probably take two quarters or so before the economy embarks towards a path of normalcy”.
“In the interim, as the USD stays strong amid the funding stress, further weakness in the KRW to 1,280 in 2Q20 and 1,300 in 3Q20 may be on the cards. After which, assuming a Asia wide recovery takes root in 4Q20, USD/KRW may start to normalize lower, towards 1,250 in 4Q20 and 1,220 in 1Q21.
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