The Korean Won has gained the most ground of all APAC currencies over the last three months. Economists at ING expect the USD/KRW pair to break below the 1200 level.

KRW to strengthen despite chip slump

“China’s reopening and a possible policy change by the BoJ could encourage further KRW appreciation.”

“However, Korea’s chipmakers are experiencing slowing demand and there is a growing possibility that the current account balance may record a deficit during the first quarter of 2023.”

“We expect the Bank of Korea to enter an easing cycle in the second half of the year, echoing our expectations for Federal Reserve rate cuts.”

“We think the KRW will eventually break 1200 and touch 1180 later this year.”