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: 1,320 – 1,360 KRW per 1 USD

This week’s forecast:

While the KRW-USD exchange rate shows higher volatility after the sharp decline in early November, it is forecast to fluctuate in line with the greenback’s strength and the decision by Monetary Policy Board (MPB). The U.S. dollar is expected to stay strong with a final rate hike forecast through remarks from Fed officials and the release of the November Fed minutes this week. Although hawkish Fed comments will have a limited impact on the market, the U.S. dollar will see upward pressure due to remarks on the final interest rate hike. 

While the MPB is forecast to raise the key rate by 25 bp, whether the Bank of Korea (BOK) governor will deliver a less hawkish tone following the sharp decline in the exchange rate in November, and whether the BOK will prepare more measures to stabilize the FX market, will affect the volatility of exchange rate. Volatile yuan is expected along with China’s response to the recent Covid-19 situation.

Last week’s trend:

Earlier this week, the KRW-USD exchange rate dropped by 100 won, before it rose due to payment inflow and stock market loss. As the yuan became stronger followed by China’s policy to keep the property market stable and a positive signal from the meeting between the U.S. and China, the KRW-USD exchange rate climbed along with the won’s strong performance. 

Midweek, the KRW-USD exchange rate rose on account of geopolitical risks induced by the war in Ukraine. The exchange rate increased in the wake of the growing demand for safe assets amid concerns over the escalation of the war from a report on Russian missile strikes in Poland and extended net foreign selling amidst risk avoidance. 

Later in the week, on the15th, the KRW-USD exchange rate rose further amid overseas remittance demand following dividend payments from Samsung Electronics and SK Hynix and the weakening yuan. 

A stronger greenback put downward pressure on the exchange rate amid the Fed’s aggressive tightening path, following the rate hike suggestion by the St. Louis Fed President to a level between 5% and 7%. 

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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Voted the best bank in Korea by Global Finance, Hana Bank strives to be the leader in banking services offering signature expat services in a variety of languages.

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