Korea Investment & Securities, won/dollar exchange rate continues to rise, but not a change in trend

(Seoul = Yonhap News) Reporter Lim Eun-jin = Korea Investment & Securities diagnosed on the 17th that the won/dollar exchange rate has risen since the U.S. Federal Open Market Committee (FOMC), but it is not a trend reversal.

Researcher Mundown analyzed in the report, "After the FOMC press conference in September, the NDF (offshore difference settlement forward) exchange rate rose to 1,377 won," and "The Federal Reserve (Fed) has raised the base interest rate and will increase it further in the future. Meanwhile, international oil prices continue to rise, which is stimulating pressure on the strong dollar."

He said, “Considering the external situation, the upward pressure on the exchange rate is high before the midterm elections in early November,” and said that the company is approaching the upper end of the appropriate range of 1,280 to 1,420 won per dollar for the year.

Accordingly, he said, "The closer you get to the top, the more the dollar becomes too expensive as the supply and demand concentration that delays sales increases as of now. As you get closer to the top, I recommend avoiding additional dollar purchases and gaining foreign exchange profits from existing assets, but increasing short-term foreign exchange hedging if possible."

He explained, "Significant upper resistance is expected around 1,400 won, but if the geopolitical conflict reaches its worst, it is difficult to predict the upper end. At this time, not only the exchange rate, but also the entire outlook for major countries' economies and monetary policies and global assets will change, so we are not considering it as a baseline outlook yet."

He predicted, "The factor that is currently driving up the exchange rate is the external strong dollar pressure, and after the strong dollar pressure eases, if internal conditions are reflected, the downward pressure on the exchange rate will increase again."