This week, USD/KRW is expected to test a decline from around the 1,340-yen level to the low 1,300-won range, with U.S. inflation indicators and the Federal Reserve’s stance expected to determine the direction. USD/JPY is expected to remain in the ¥157–¥158 range, while market attention is focused on U.S. inflation indicators and a speech read on behalf of the Bank of Japan governor.
This week, U.S. September inflation indicators and the Federal Reserve’s monetary policy stance will be factors determining the direction of the foreign exchange market. Depending on core inflation trends, the market may enter a phase of dollar strength or weakness.
Last week, USD/KRW fell to around KRW1,340, and amid continued dollar selling by exporters, the possibility of a further decline to the low KRW1,300s has been discussed. Attention to South Korea’s fiscal soundness is also expected to support the won.
The release of the U.S. September Consumer Price Index (CPI), Producer Price Index (PPI), retail sales and Beige Book is attracting market attention. If the inflation indicators exceed expectations, upward pressure on the dollar may intensify. Conversely, confirmation that core inflation remains stable could cause expectations for further rate hikes to recede.
USD/JPY is expected to remain in the ¥157–¥158 range. The dollar’s movements are expected to be influenced not only by U.S. inflation indicators but also by a speech read on behalf of the Bank of Japan governor and the BOJ’s policy signals. The U.S. September CPI is scheduled for release on the 14th, followed by PPI and retail sales on the 15th.
Meanwhile, exporters’ dollar selling is continuing, and situations in which downward pressure on the won intensifies are anticipated. At the same time, an improved assessment of fiscal soundness resulting from higher tax revenue in South Korea could support the won.