Today Thursday (August 25), the Asian plate. The dollar was quoted at 1336.8200 against the Korean won, down 0.21%. The market believes that the Korean won is likely to depreciate further in the future due to the impact of South Korea’s import and export situation. According to data released by the Korea Customs Service, from August 1 to 20, South Korea’s trade balance recorded a deficit of US$10.217 billion, and it may have a deficit for five consecutive months.
According to Yonhap News Agency reported on the 24th, the Bank of Korea’s Financial and Monetary Committee is scheduled to announce on the 25th to raise the benchmark interest rate by 0.25 percentage points. It is reported that the main reason for the Bank of Korea to raise interest rates further is inflation pressure, but the Fed also leaves the Bank of Korea with no choice. With South Korea’s price index soaring 6% last month and not peaking, the U.S. benchmark interest rate is already higher than South Korea’s benchmark interest rate. If the interest rate gap continues to widen, South Korea’s prices and the won exchange rate may worsen. There is also a view that the Bank of Korea has raised its benchmark interest rate for two consecutive months, which may pour cold water on South Korea’s economic recovery.
Reminder: The Fed is expected to slow down the pace of interest rate hikes, and whether the dollar can maintain its upward trend will wait for Powell’s speech. The European energy crisis continues to weigh on the euro.