According to Jinshi Data, Min Joo Kang, senior economist at ING, said that after the Bank of Korea unexpectedly cut interest rates, ING changed its expectations for the Korean won. It is expected that the Bank of Korea will continue to cut interest rates in the future, which may put pressure on the Korean won.
The widening gap in economic growth and yields between the United States and South Korea has become a risk factor for won-denominated assets. ING expects the won to be between 1,375 and 1,475 against the dollar next year, up from its previous forecast of 1,350 to 1,400.
The trend of the US dollar will affect overall capital flows, but the won may be hit harder than other Asian currencies. Factors such as a large trade surplus with the United States, high dependence on exports and geopolitical sensitivity make the won very sensitive to external shocks.