USD/KRW: Equity-led appreciation on chip hype
USD/KRW: Equity-led Appreciation on AI Chip Hype
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The KRW once again sensitively reacted to the Fed’s additional hike possibility and fears of a regional bank run and returned all the earlier gains brought about by the AI chip hype.
The trade balance turned positive after fifteen months in the red as imports declined sharply due to falling commodity prices.
We expect terms of trade to improve further thanks to strong demand in transportation equipment and the Middle East’s investment boom, while commodity prices remain soft. Thus, we expect the KRW to appreciate for a while until markets begin to re-think Fed direction after the expected rate hike in July.