[Today's FX Dealers' Expected Dollar-Won Range]

(Seoul=Yonhap Infomax) Seon Mi Jeong – On the 26th, dealers in Seoul’s foreign exchange market expect the dollar-won exchange rate to trade lower, centering around the 1,460 won level.

With expectations for a U.S. rate cut in December remaining intact and recent U.S. economic data coming in weaker than anticipated, the dollar index has slipped below the 100 mark.

Dealers noted that the prevailing dollar weakness and sustained risk appetite are exerting downward pressure on the dollar-won pair.

Market participants are also closely watching an emergency press briefing on the FX market scheduled for this morning by Deputy Prime Minister and Minister of Economy and Finance Koo Yun-cheol. Should the government deliver a stronger-than-expected message, dealers believe a move into the 1,450 won range is possible.

Expectations for an end to the Russia-Ukraine war are also cited as a supportive factor for the Korean won. According to reports, the Ukrainian delegation has agreed to a potential peace deal, and U.S. President Donald Trump has indicated that the likelihood of a ceasefire has increased.

In the New York non-deliverable forward (NDF) market, the 1-month dollar-won contract was last quoted at 1,463.40 won (mid) overnight. Accounting for the latest 1-month swap point of -2.35 won, this represents a decline of 6.65 won from the previous Seoul spot market close of 1,472.40 won.

The expected trading range for the day is projected at 1,458–1,470 won.

◇ Dealer at Bank A

Yesterday saw intense competition between the FX authorities’ efforts to stabilize the exchange rate and dollar buying flows. On the back of overnight news regarding the potential signing of a Russia-Ukraine peace agreement and the favorable stance of National Economic Council Chairwoman Lael Brainard—considered a leading candidate for the next Fed chair—toward rate cuts, we expect the dollar-won rate to be biased lower today. However, continued dollar buying is likely to provide support at the lower end of the 1,460 won range.

Expected range: 1,462.00–1,469.00 won

◇ Dealer at Bank B

With the dollar index declining and risk appetite holding firm, the trend appears bearish for the dollar-won pair. We are monitoring remarks from the Deputy Prime Minister’s press briefing; if the comments are stronger than anticipated, a break below 1,460 won is possible. Given that recent verbal interventions by authorities have had limited impact, the tone may be more forceful. Exporters remain largely on the sidelines, and further downward momentum may be needed to trigger hedging flows.

Expected range: 1,460.00–1,470.00 won

◇ Dealer at Bank C

We expect the market to open lower in the 1,460 won range. Hopes for a Russia-Ukraine ceasefire and expectations of Fed rate cuts have revived risk appetite. The weaker dollar is also likely to curb recent won weakness.

The FX authorities’ strong commitment to market stability is lending further downside pressure to the dollar-won pair, with particular attention on the emergency press briefing by the Deputy Prime Minister at 10:00 AM. Should a strong stabilization message be delivered, a move into the 1,450 won range is anticipated.

Expected range: 1,458.00–1,469.00 won

smjeong@yna.co.kr

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