Bias: bullish-to-range-bound, USD/KRW sits above its 90-day average and in the upper half of the three-month range.
Key drivers:
- Rate gap: The Fed is expected to cut rates later in 2026 while Korea stays vigilant on inflation, supporting a firmer dollar vs the won.
- Macro factor: BoK inflation concerns have kept the won weak as investors watch for fundamentals that could justify USD/KRW at higher levels.
- Retail flows: A surge in Korean retail investors’ dollar demand, tied to overseas stock holdings, has kept the won under pressure.
Range: likely to drift within the three-month range, with occasional tests of the upper end.
What could change it:
- Upside risk: hotter US data or a less aggressive Fed rate-cut path could push USD/KRW higher.
- Downside risk: renewed stabilization steps by Korea or a more determined BoK stance easing the upward pressure on the won.
