The market bias for the USD to KRW exchange rate is currently bearish.
Key drivers include:
- The anticipated multiple interest rate cuts by the Federal Reserve, expected to weaken the USD and encourage more selling.
- Concerns from the Bank of Korea about inflation, which could foster a more stable KRW if adequately addressed.
- Predictions of the KRW remaining weak against the dollar due to South Korea's economic policies and increased overseas investments by local investors.
In the near term, the USD to KRW exchange rate is expected to trade within a narrow range. The current price is just slightly below its three-month average, indicating stability despite recent fluctuations.
Upside risks could arise from improved global economic conditions, which might support a stronger USD. Conversely, increased depreciation of the KRW, if inflation outpaces projections, could put downward pressure on the exchange rate, leading to a more challenging environment for those exchanging currencies.
