Korean won snapped an eight-week losing streak, rising 1.3% against the US dollar in the first week of October. Nevertheless, economists at MUFG Bank expect a weaker KRW by the end of Q4 this year.

KRW to be affected by sentiment in near-term

“The KRW likely remains largely driven by external drivers near term. Given a persisting US dollar strength and global growth concern, particularly recessions in UK, Europe and US, we see the pro-cyclical KRW to remain under-perform relative to EM Asian currencies.”

“Also, with a possible worsening of current account balance caused by deteriorating exports amid a softening semiconductor industry and weakening global demand, we see USD/KRW to move up to 1,470 by the end of Q4 this year.”