Brown Brothers Harriman’s (BBH) Elias Haddad highlights that the Korean Won is underperforming, with USD/KRW surging to its highest level since 2009. Haddad attributes the weakness to South Korea’s negative net energy balance and negative real rates, and while authorities vow to curb excessive FX moves, intervention is seen as only slowing, not reversing, KRW depreciation during the ongoing energy shock.

Authorities struggle against weak Won

"KRW is underperforming across the board, with USD/KRW surging to 1540.55, the highest level since March 2009."

"The slide in KRW largely reflects South Korea’s negative net energy balance and negative real rates."

"South Korea vowed again today to curb excessive one-sided FX move."

"However, until the energy shock fades, FX intervention is more likely to slow KRW depreciation than unwind its massive undervaluation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)