■ USD-KRW climbs as KRW depreciates along with other Asian currencies

The USD-KRW rate opened October 17 at KRW1,140.2, up KRW8.1 from the previous close, reflecting upward pressure on the USD in global markets after the release of solid U.S. economic indicators. The USD-CNY rate rose to CNY6.7379, the highest level since 2010, as the People’s Bank of China devalued the CNY further. The KRW lost strength in sync with most Asian currencies. The USD-KRW rate climbed further to KRW1,143 during trading hours, but the upside was limited by USD inflow from exporters. The rate closed the day at KRW1,137.9, up KRW5.8 from the previous close.

■ Upward pressure on USD weakens as Fed rate hike concerns ease due to weak economic data



Industrial production in the U.S. rose 0.1% MoM in September, missing the consensus (+0.2% MoM). The Empire State Manufacturing Survey came in at -6.8 for October, lower than the previous month’s figure (-2.0) and the consensus (1.0). Rate hike concerns eased slightly as Fed Vice Chairman Stanley Fischer made no comments on the timing of rate increase. The USD declined against major currencies. The EUR-USD rate rose to near USD1.1. The USD-JPY rate fell to the high-JPY103 level.

■ USD-KRW to adjust its pace given CNY depreciation is limited ahead of China’s GDP data release

The USD-KRW rate is expected to open today at KRW1,137, near the previous close, based on NDF exchange rates. The upward pressure on the USD decreased slightly as caution against a rate hike weakened with sluggish U.S. economic readings. The CNY depreciation, which has caused the USD-KRW rate to rise, is likely to be limited ahead of the release of China’s 3Q GDP and September economic data tomorrow. The USD-KRW rate is projected to adjust its pace in the mid- and high-KRW1,130 range, following recent gains.

Source : Shinhan Investment Corp. / Economist Sung-In Sun (sungin03@shinhan.com)