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: 1,235 – 1,255 KRW per 1 USD
This week’s forecast:
This week, the continued global trend of a strong US dollar is expected to put upward pressure on the KRW-USD exchange rate. Increased pressure on economic growth with record-high US inflation, Fed tapering, and investors’ scrambling for safer assets amid intensifying geopolitical risks have made the greenback gain strength against a basket of others, and this rally seems to continue for a while.
Yet, the volatility may play out, depending on the implications of upcoming economic indexes and US Treasury yields, not on any comments made by Fed officials ahead of its May FOMC meeting.
Moreover, as Russia and Ukraine are now facing a new phase of war after the Seige of Mariupol, the outcomes of their prolonged conflict will affect the dollar strength. In light of this, additional European sanctions against Russia and warning signs of a Russian default may serve as a factor to drive the rate up.
Last week’s trend:
The Korean-US dollar (KRW-USD) exchange rate opened the week up amid the sustained dollar strength and hawkish comments of Fed officials. Also, coupled with the weakening Chinese yuan and Japanese yen, the increasing level of remittance overseas by foreign investors steadily pushed the rate up.
At mid-week, the rate edged down a bit, influenced by traders’ bet on a hefty rise in US interest hikes. When the yen turned weak against the greenback right before hitting above the 130 level, it went down even further.
Later in the week, the greenback started rallying against other currencies globally, just after Fed Chairman Jerome Powell signaled the central bank’s plan to raise interest rates by 50 basis points in May at a panel discussion hosted by the IMF. But the rate’s move remained limited as the yen got stronger backed by expectations of a currency intervention by the Japanese government.
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.