Korean Won: Export boom supports currency – DBS
Chang Wei Liang at DBS Group Research highlights Korea’s strong September export performance, driven by an AI-led semiconductor boom and a record monthly trade surplus. While this backdrop should support the Korean Won (KRW), he cautions that KRW may not repeat its third-quarter gains as valuation has turned neutral and portfolio outflows could rise as hedging activity fades.
Semiconductor surge but gains may slow
"Korea’s Sep exports beat expectations again, rising by 83.5% y/y (exp: 62.5%, Aug: 68.7%)."
"The AI-led semiconductor boom exhibits no slowing in momentum, with semiconductor exports surging 263% y/y, up from an already massive 209% gain in Aug."
"The trade surplus also jumped to USD50bn in Sep from USD35bn in Aug, marking another record high monthly trade surplus."
"While we think the solid export performance should support the KRW, we don’t necessarily see the KRW repeating its Q3 gains as the KRW DEER valuation has turned neutral, and portfolio outflows are likely to pick up as hedging activity fades."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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