USD/KRW: Potential to break above 1,300 – ANZ

It is export demand that hurts the South Korean won, according to economists at ANZ Bank. USD/KRW is trading at 1218.32.

Key quotes

“Similar to China, the South Korean economy is now affected by a slump in external demand due to lockdowns among key trading partners.”

“Exports in the first 20 days of April fell by 26.9% y/y, and the contraction could be close to or worse than during the GFC. The KRW ultimately moves in line with its export prospects.” 

“With the additional geopolitical uncertainty surrounding the health of the North Korean leader, we see potential for USD/KRW to break above 1,300.”