"No Factors for KRW-USD Exchange Rate to Fall... Increased Pressure on KRW Weakness in First Half"-Korea

Korea Investment & Securities stated on the 2nd that "the pressure for KRW weakness both domestically and internationally is expected to be high in the first half of this year," and raised the average exchange rate forecast for the first quarter to 1,440 KRW.

Moon Da-woon, a researcher at this securities firm, analyzed, "The KRW-USD exchange rate surged to 1,486.7 KRW during the day (December 27) as the impeachment process of President Yoon Seok-yeol progressed following the martial law situation last December," adding, "There were signs of prolonged political uncertainty until Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, took over as acting authority."

He continued, "Despite the authorities' market stabilization measures, the sensitivity of the exchange rate to political events significantly increased in the year-end market, where trading volume was relatively low," and pointed out, "As a result, the KRW-USD exchange rate quickly broke through the short-term resistance level of 1,450 KRW and closed the fourth quarter at an average of 1,399 KRW."

He predicted, "There are no suitable factors for the exchange rate to fall for the time being," and added, "In January, the upward pressure on the KRW-USD exchange rate is greater due to external strong dollar pressure and internal political instability and economic sluggishness."

Furthermore, he stated, "Once the KRW-USD exchange rate has risen to a certain level, it is expected to fluctuate mainly in the mid-to-high 1,400 KRW range for the time being, with the next significant upper level anticipated to be the big figure of 1,500 KRW," and "The domestic and international factors for KRW weakness are expected to ease by the end of the first quarter rather than the beginning, and more so by the end of the second quarter."

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com