USD/KRW Outlook: Slightly positive, but likely to move sideways, as the rate is above the 90-day average but lacks a clear driver for significant movement.
Key drivers:
• The gap between the U.S. Federal Reserve and the Bank of Korea is notable, with the Fed recently halting rate cuts while the Bank of Korea expresses concerns about the KRW's depreciation.
• Oil prices are trading near average, which typically supports the KRW, given South Korea's dependence on energy imports.
• Domestic concerns in South Korea over inflation and currency volatility create uncertainty, though capital inflows point toward a potential KRW strengthening.
Range: USD/KRW is likely to hold within its recent range, possibly drifting as traders assess ongoing developments.
What could change it:
• An unexpected rise in U.S. inflation or economic data could boost the USD.
• Increased geopolitical tensions and tariff threats from the U.S. could further weaken the KRW.
