Korean Won – US Dollar Weekly FX Rate Forecast

Here’s this week’s forecast for the Korean won-US dollar exchange rate from Hana Bank.

The weekly forecast is neither a guarantee nor a promise of accuracy and is intended to give our readers information on the forecasted foreign exchange rate from the bank each week.

Check out the most up-to-date foreign currency exchange rates for over 40 currencies here.

Trading range: 1,350 – 1,370 KRW per 1 USD

This week’s forecast:

The euro is sliding, affected by Russia’s shutting down the natural gas pipeline to Europe. Also, the yuan remains weak due to the expansion of Covid-related lockdown in China. Under such conditions, the market will attempt to raise the KRW-USD rate to its highest point of the year. However, any sharp rise will be curbed by possible intervention by the government and dollar-selling volume ahead of Chuseok holiday. 

With investors warily awaiting the Fed’s announcement of August CPI, hawkish comments by several Fed officials will support the US dollar. In the lead up to the ruling Communist Party’s meeting in October, China is extending lockdown in its major cities. Due to the circumstances, the Chinese government appears to set its fixing for the yuan weaker. In response, the Korean won is likely to weaken, too.   

On the other hand, the ECB is expected to hike the base interest rate by 75bp. As the euro’s gain is limited by the continent’s energy crunch, the greenback will unlikely turn downward

Last week’s trend:

The Korean won-U.S. dollar (KRW-USD) exchange rate opened the week up, driven by the greenback’s rally following Federal Reserve Chair’s Jackson Hole speech. Amid expectations that the Fed will tighten monetary settings further, the KRW-USD rate rose sharply. 

At mid-week, as the rally in the US currency took a breather, the KRW-USD rate went down. Factors pushing down the rate include a stronger euro aided by the European Central Bank(ECB)’s hawkish stance, and a fall in natural gas prices. 

Later in the week, with investors betting on a stronger US dollar, the KRW-USD rate surged to the 1,360 level as markets remain risk averse.

Disclaimer: Neither Hana Bank nor Haps Korea shall accept any liability for any damage or loss, including but not limited to profit or loss, that may arise either directly or indirectly from use of this information.


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