USD/KRW: Downside risks build as flows improve – OCBC

💡 DMK Insight

USD/KRW is feeling the heat from a weaker dollar and stronger JPY, and here’s why that matters: The recent drop in USD/KRW highlights a shift in market sentiment, driven by a combination of dollar weakness and a robust performance from the Japanese yen. This is significant for traders, as it suggests a broader risk-on environment, with foreign inflows into Korean equities boosting the KOSPI. If this trend continues, we could see further depreciation of the dollar against the won, especially if pro-risk sentiment persists. Traders should keep an eye on key resistance levels in USD/KRW; a break below recent lows could trigger more selling pressure. Additionally, watch for any shifts in foreign investment flows into Korea, as they can impact the currency’s strength. On the flip side, if the dollar rebounds due to unexpected economic data or geopolitical tensions, we might see a quick reversal in this trend. For now, monitor the USD/KRW pair closely, especially around psychological levels that could signal further moves. The next few trading sessions will be crucial in determining whether this trend has legs or if it’s just a temporary blip.