Forex
Home›Forex›Major Pairs›USD/KRW seen consolidating as current-account surplus…
USD/KRW seen consolidating as current-account surplus boosts won
The won gained more than 12% versus the dollar from late June to about 1,385, as reduced hedging and repatriation offsets helped the surplus translate into stronger KRW.
Commerzbank analysts Charlie Lay and Dr. Henry Hao said the South Korean won is likely to consolidate against the US dollar as the focus shifts to how South Korea’s large current-account surplus is being recycled into currency inflows.
FXStreet reports the pair USD/KRW has fallen from around 1,560 at the end of June to about 1,385, implying KRW has gained over 12% versus USD over that period, with a record current-account surplus and a smaller financial-account offset remaining supportive.
The analysts noted that increased National Pension Service hedging and corporate repatriation have reduced earlier financial-account offsets, which had helped keep KRW weaker despite persistent current surpluses, and cited semiconductor-related repatriation after a US listing as an example.
Looking ahead, they pointed to Bank of Korea tightening, including July MPC minutes indicating agreement on further tightening with some debate about timing, and said the appreciation’s effect on financial conditions could slow additional gains, leading them to expect USD/KRW to consolidate near 1,350 to 1,400.