The market bias for the USD to KRW exchange rate is currently bearish.
Key drivers include:
- The Federal Reserve is poised for three interest rate cuts which may weaken the USD over the coming months.
- The Bank of Korea expresses concerns that a weaker won could push inflation beyond targets, indicating potential for currency support.
- Global economic improvements and rising commodity prices can also influence the USD's performance, introducing volatility.
Expect the trading range for USD/KRW to remain relatively stable with slight fluctuations around current levels over the next few months.
An upside risk could arise from stronger-than-expected U.S. economic data, which might bolster the dollar's position. On the other hand, a significant downturn in South Korea’s economic outlook could lead to more aggressive interventions from the Bank of Korea, potentially stabilizing or strengthening the won against the dollar.
