Halister News

(Bloomberg) -- USD/KRW may extend this month’s rally and test resistance at 100-DMA, currently 1,184.35, with BOK perhaps dovish tomorrow given weak economic performance.

• Four new board members joined BOK last month; seen by many investors as more dovish
• Still, 15 of 18 economists in Bloomberg survey expect BOK to leave benchmark interest rate at 1.50% tomorrow; three predict 25-bp cut
• Market is pricing in one rate cut in next six months
• Economic performance may encourage dovish stance
  • Exports continue to decline, falling 11.2% y/y in April, 16th consecutive month of negative y/y growth
  • Despite April consumer confidence rising to 101 from 100, remains below levels seen before Sewol ferry disaster two years ago
• BOK may also refer to exchange rate in statement, signaling that it is tolerant of weaker won to aid exports
• MACD bullishly above zero and signal line; initial resistance at 200-DMA, now 1,175.89
• USD/KRW down 0.3% at 1,164.40
• 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.