USD/KRW to end this year at 1,320.0 – MUFG
02.12.2022, 16:11

USD/KRW to end this year at 1,320.0 – MUFG

Analysts at MUFG Bank, point out that the stress on the Korean Won is unlikely to fade in a near term horizon. They forecast USD/KRW at 1330.0 by the end of the first quarter of next year and at 1270.0 in twelve months. 

Key Quotes:

“The won appreciated last month on improving risk-on sentiment spurred by the prospect of a slower pace of Fed rate hikes. The performance of KRW was consistent with benchmark KOSPI Index rising more than 7% and foreign investors’ net buying of USD2 billion worth in Korean equities in the month.”

“Data-wise, South Korea’s current account balance flipped to a surplus of USD1.61 bn in September after a deficit of USD3.05 bn in August; the country’s lower-than-expected unempolyment rate (2.8% in November vs Bloomberg consenus’s 2.9%); and continuous efforts to stabilize its credit market, these helped boost sentiment. Having said that, its latest economic indictors still pointed to the weakness ahead. South Korea’s early exports (first 20 days) contracted for the third straight month in November, indicating the risk to a trade-reliant part of the economy amid softening external demand.”

“The growth deceleration, and the potential strengthening of the dollar in upcoming quarter implies a slightly weaker KRW. We expect USD/KRW to end this year at 1,320.0.” 

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