South Korean Won: Intervention risks support KRW against US Dollar – DBS
Chang Wei Liang at DBS Group Research notes that KRW is currently the best performing Asian currency, supported by strong semiconductor demand and reported FX intervention coordination between Korea, the US and Japan.
DBS Group Research's Chang Wei Liang has highlighted KRW as the top-performing Asian currency this week, buoyed by robust semiconductor demand and potential coordinated FX interventions among South Korea, the US, and Japan. Despite fluctuations in Korean chip stocks, memory demand and AI-related semiconductor requirements continue to surge, which is fueling a favorable trade balance for Korea and propelling KRW's value.
However, DBS remains cautious regarding intervention risks, preferring to maintain a short position on USD/KRW. The research emphasizes that KRW's growth is just beginning to capitalize on the current term of trade boom, while acknowledging that the Korean government has reportedly collaborated with the US and Japan in FX market interventions, albeit on a smaller scale compared to Japan's interventions. This perspective reinforces DBS's decision to stay short on USD/KRW.
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