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Strong South Korea exports back KRW and KOSPI outlook

DBS expects August headline and core CPI near 3%, supporting the case for additional Bank of Korea rate hikes this year.

Reported · Written up by our desk · Central Banks

FXStreet, citing DBS Group strategists Taimur Baig and Nathan Chow, said South Korea’s August exports are expected to hold near 60% year-on-year, helping underpin the outlook for both the KOSPI and the South Korean won (KRW).

DBS pointed to early trade data, noting the first 20 days of August suggest exports around +56% year-on-year, and projected a trade surplus of roughly USD 30 billion. The strategists said export growth likely peaked at 70.4% year-on-year in June and is set to moderate again in August.

On inflation, DBS expects headline and core CPI around 3%, with headline CPI rebounding to about 3% after moderating to 2.8% in July, and core CPI edging up toward 3%. That view, according to the strategists, reinforces their stance that further Bank of Korea rate hikes remain likely this year, with August trade and inflation data flagged as key upcoming signals.

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