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.
DBS Group Research analyst Chang Wei Liang points to Korea's robust September export performance, fueled by an AI-driven semiconductor surge and a record monthly trade surplus. In his assessment, while this situation should bolster the Korean Won (KRW), he anticipates the currency may not replicate its Q3 gains, as its valuation has become neutral and portfolio outflows might increase with diminishing hedging activity.
Korea's September exports surpassed expectations once more, climbing by 83.5% year-over-year (targeted at 62.5%, August: 68.7%). The AI-led semiconductor boom shows no signs of slowing down, with semiconductor exports surging 263% year-over-year, an increase from a staggering 209% growth in August. The trade surplus also expanded to USD50bn in September from USD35bn in August, marking another record-breaking monthly trade surplus.
Although Chang Liang believes the strong export performance should bolster the KRW, he does not anticipate the KRW to repeat its Q3 gains, as KRW DEER valuation has turned neutral, and portfolio outflows are likely to rise as hedging activity wanes.
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