South Korean Won: Rally faces consolidation risk on policy week – OCBC

OCBC’s Sim Moh Siong and Christopher Wong note that South Korean Won (KRW) has extended its rally, with USD/KRW briefly touching 1380 on exporter and corporate US Dollar (USD) selling and a softer USD backdrop. While the domestic environment is constructive, with strong exports and a trade surplus, they warn that elevated Oil and US yields plus Bank of Korea (BoK) and Jackson Hole event risk could trigger near‑term consolidation.

USD/KRW support tested after sharp move

"KRW extended its rally into Friday, with USDKRW falling to low of 1380 at one point."

"Exporter and corporate USD selling, alongside the softer broader USD, appear to have provided the more consistent support, while foreign equity flows were mixed. The domestic backdrop also remains constructive, with exports up 56% YoY in the first 20 days of August on record semiconductor shipments and a sizeable trade surplus."

"After the sharp move, some consolidation would not be surprising, particularly with oil and US long-end yields still elevated."

"Attention this week turns to Jackson Hole, where any shift in Fed expectations or the USD could determine whether KRW extends its gains or pauses after the recent rally. Domestically, focus is on BoK MPC decision (Thu)."

"Mild bullish momentum faded while RSI Is near oversold conditions. Near term consolidation not ruled out. Support at 1380 (recent low), 1375 levels. Resistance at 1398 (76.4% fibo retracement of 2025 low to 2026 high), 1406 levels."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)