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: 1,280 – 1,320 KRW per 1 USD
This week’s forecast:
The KRW-USD exchange rate is expected to drop from the previous week with the November CPI and rate-setting meetings in major countries (U.S., Eurozone, and UK). If the CPI shows evident price drops, it may play as an additional downward pressure. Meanwhile, Fed officials are expected to raise the dot plot forecast for the terminal rate at the FOMC, which is likely to support the greenback.
Furthermore, China’s easing COVID restrictions may cause the exchange rate to keep falling. The National Pension Service’s (NPS) policy shift to the forex hedge is expected to boost buying sentiment in domestic supply and demand. The NPS will make a decision for the forward point adjustment on the hedges at the NPS’s Fund Operation Review Committee on December 16. Its policy shift could supply about $17 billion to 35 billion worth of U.S. dollars in the local forex markets, which could be a relief to the local currency.
Last week’s trend:
Earlier this week, the KRW-USD exchange rate fell due to the stronger yuan with expectations for the Chinese government’s lifting COVID restrictions. Chinese authorities easing its zero-COVID measures increased risk appetite while strengthening the yuan.
Midweek, the KRW-USD exchange rate rose by the strong greenback due to concerns about the Fed’s higher terminal rate followed by the optimistic US services sector. Growing risk avoidance, followed by worries about the Fed’s rate-hike plan, led to a further increase in the exchange rate.
Later in the week, the KRW-USD exchange rate turned downward as the Treasury yield dipped along with the strong dollar amid the decline in the U.S. Unit Labor Costs (ULC). Risk appetite and net foreign purchases in the stock market also served as downward pressure on the exchange rate.
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.
