Societe Generale reports that the Korean Won remains under selling pressure despite strong export growth and a wider trade surplus. USD/KRW has broken above the 1,550 psychological level, with interim resistance identified higher. The bank links AI-driven export gains and rising inflation to a clearer path for the Bank of Korea to resume tightening, starting with a 25bp hike in two weeks.

Won under pressure despite robust exports

"The KRW is another Asian currency struggling to shake off selling pressure."

"Strong export growth of 70.9% in June and the widening of the trade surplus to $36.2bn from $27.03bn in May failed to block the foray of USD/KRW above the psychological barrier of 1,550."

"Interim resistance is situated at 1,561 before 1573/1580."

"The AI led jump in exports and acceleration of inflation to 3.2% in June clears the path for the BoK to resume policy tightening, starting with 25bp to 2.75% in two weeks."

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