Global IB - KRW

 

주요 IB 환율전망

 

MS

- KRW should benefit in the near term from a reflationary rally.

But its macro dynamic of below-trend GDP growth and external surplus is neutral for the KRW in the medium term.

 

- Bullish.

Although we believe the Bank of Korea has been intervening, this seems to have focused on smoothing KRW movements rather than stopping it outright.

- This willingness to allow appreciation has surprised us and may reflect government comfort with the recent improvement in the trade and current account balances

 

BNP Paribas

- Bullish.

The KRW remains an outperformer, despite BOK intervention to slow KRW gains.

The increased trade surplus on the back of rising exports is KRW positive.

- USDKRW targets the 1080 support next.

We stay short JPYKRW at 13.77 entered on 23 Oct with target at 13.50 and stop lowered to breakeven (from initial 13.97).

 

Credit Suisse,

- Importantly, we think the Korean authorities are more willing to allow the won to appreciate in response to improvements in current account flows.

- In contrast, recent BoK testimony to the Korean parliament reaffirmed that the Bank views equity flows as more speculative and potentially worth accumulating through intervention rather than allowing them to drive won appreciation.

- Net foreign portfolio inflows of approximately $1.4bn in October added to pressure on the

won.

This seems likely to continue, in our view. Net inflows into bonds of $2.4bn dominated October flows and much of which came from central banks.

- Foreign equity flows were negative in October, but we expect them to improve into year-end if global risk appetite rises in line with improving industrial production momentum.

- The above leaves intervention as the key unknown, in our view.

The authorities have seemed to defend 1090 recently, but it is unclear if this represents a pause, or a line in the sand.

- We think if exports improve further and the trade surplus remains robust, the authorities will likely allow some further appreciation toward our medium-term forecast of 1070.

 

GS

Target 1068 / 1085 

저항 1111~1115

The market has breached both 1107~1111 and now headed towards 76.4% retrace of the Aug '11/OCT '11 rally.

 

Citi

정부 개입 가능성 높게 봄(YY)

 

HSBC

- KRW has been boosted by strong equity inflows in the aftermath of global central bank easing.

- The BoK recently delivered a 25bp cut for the second time this year, bringing rates down to 2.75%.

- This could increase the risk of FX policy shifting against the KRW, but we think the focus remains on volatility.

- If the broader regional data did start to pick up, then the KRW would remain well-placed to appreciate