USD/KRW seen to trade within 1,050-1,100 over foreseeable future due to higher UST yields, Dollar sell-off: ScotiaBank
Source: FxWire Pro - Commentary / 25 Apr 2018 01:10:43 America/New_York
The USD/KRW currency pair is expected to trade within the 1,050-1,100 range over the coming future, owing to rise in United States’ Treasury yields, a broad-based dollar sell-off of Korean exporters and evolving geopolitics, according to the latest research report from Scotiabank.
Rising UST yields have recently overshadowed the upcoming inter-Korean and US-N. Korea summits, sending USD/KRW higher despite a relatively steady VIX index. The yield on the 10-year US Treasury note, the benchmark for US auto loans, mortgages, and other lendings, climbed to 3 percent during the overnight session Tuesday for the first time since January 2014.
Further, there still exist hopes of a peace treaty to be signed to end the Korean War. In addition, US President Donald Trump on Tuesday said the country would likely reach a trade agreement with China and that officials from both sides would sit down for negotiations in a few days, according to Reuters.
The two Koreas are set to hold a summit meeting on Friday at the truce border village of Panmunjom, while US President Donald Trump and North Korean leader Kim-Jong-Un plan to meet sometime in May or early June at a yet-to-be-announced location.
Meanwhile, North Korea is now seeking to focus solely on economic development, saying on Saturday that it would immediately suspend nuclear and missile tests and scrap its nuclear test site. However, North Korean leader Kim said that the nation wouldn’t use its nuclear weapons unless provoked and pledged that the country wouldn’t share its nuclear know-how with other countries under any circumstances.
"The BoK is expected to stay on hold in the second quarter before tightening again in the third one, given the central bank’s slightly positive real policy rate," the report added.
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