- Analytics
- News and Tools
- Market News
- USD/KRW to maintain a supportive tone near-term – Commerzbank
USD/KRW to maintain a supportive tone near-term – Commerzbank
The Bank of Korea (BoK) hiked its policy rate by 25bps to 1.75%, as widely expected. USD/KRW held steady at around 1264 after the rate decision. Economists at Commerzbank expect the pair to retain a supportive tone in the short-term.
Fighting inflation when push comes to shove
“BoK raised rates by 25bp to 1.75% as widely expected. BoK made it explicitly clear that it will emphasize fighting inflation risks in the coming months, even at the expense of growth.”
“The money market is pricing in 3.05% for the benchmark rate in one year, suggesting another 125bp worth of rate hikes in the next twelve months. The newly appointed Governor Rhee said that inflation is expected to climb above 5% from May to July and more worryingly, it could stay elevated in 2023 at 3%-4% due to higher grain prices.”
“We would note that 2.7% growth is still not too weak. However, BoK expects growth to moderate further in 2023 to 2.4% but the risks are tilted to the downside given the tightening in monetary conditions.”
“A hawkish path for BoK rate policy could provide some support for KRW, but overall, we still look for a supportive tone in USD/KRW near term.”
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
