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>>USD/KRW: ING’s key projection points to lower levels as export growth bolsters the won

USD/KRW: ING’s key projection points to lower levels as export growth bolsters the won

crypthub

about 8 hours ago

Forecast Overview

ING predicts the USD/KRW pair will continue to fall in 2025 as the South Korean won strengthens. The downward pressure stems from the country’s robust export performance, which creates sustained demand for the won. Data from early 2025 already show the won up roughly 3.5 % against the dollar. Investors and policymakers are watching the trend for its impact on regional stability.

Export‑Driven Currency Dynamics

Export sales bring foreign currency, mainly dollars, which Korean firms convert into won, lifting its value. ING’s analysis finds export growth precedes USD/KRW movements by one to two months. A persistent trade surplus fuels this demand, while narrowing U.S.–Korea interest‑rate differentials remove a traditional support for the dollar.

Key Export Sectors

Korea’s trade surplus is powered by semiconductors (≈ $48 bn, +12.5 % YoY), automobiles (+8.9 %) and refined petroleum (+5.3 %). Global digital transformation and the shift to electric vehicles keep demand strong, and supply‑chain diversification favors Korean suppliers. ING expects these sectors to sustain won appreciation throughout 2025.

Implications

A stronger won reduces import costs but can raise export prices, though high‑value products retain pricing power. Foreign investors may face lower won‑denominated returns, influencing equity and bond flows. The Bank of Korea must balance currency strength with growth and inflation targets, while U.S. monetary policy and Chinese demand remain key monitoring points.