Halister News

(Bloomberg) -- USD/KRW may test 200-DMA resistance in near-term if Bank of Korea adopts dovish stance at its meeting tomorrow, Bloomberg strategist David Finnerty writes.

• Three of 20 economists in Bloomberg survey expect BOK to cut 7-day repo rate by 25 bps, while remaining 17 predict it will keep at 1.50%
• BOK Gov. Lee said last month South Korea’s 2016 economic growth likely to fall below 3% initial forecast, although concerns about economic situation seem to have eased somewhat thanks to improvement in confidence and recovery in oil
• Lee said there were requests for BOK to do more monetary easing like developed nations that are adopting QE or negative rates, but Korea’s growth and inflation rate is higher than those countries, indicating he doesn’t support a rate cut at the moment
• Continued weak export growth may encourage central bank to adopt dovish stance; exports fell 8.2% y/y in March, 15th consecutive month of y/y declines
• New board members who are believed to be dovish will join BOK on April 20; their first rate decision is due in May
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.