The basis for optimism is China’s economic stimulus package and slowing inflation in the US. China’s economic stimulus package is correlated with the appreciation of the Yuan, while the US economic stimulus package is associated with a depreciation of the USD due to the Reserve’s tightening monetary policy. Federal Reserve (Fed).

Many believe that further appreciation of the Korean currency will depend largely on the extent of China’s economic recovery and the Bank of Japan’s monetary easing move.

A report by Shinhan Securities said the won could increase in price to about 1,300 won/USD if the yuan continues to appreciate. The USD may recover slightly. In that case, the won could fall below 1,304 won/USD. The trajectory of the yuan will need to be closely watched.

The connection between the won and the yuan is believed to stem from South Korea’s significant dependence on China to drive export growth, as many foreign investors increasingly view South Korea as a top destination. alternative to China.

According to Kiwoom Securities researcher Kim Yu-mi, the USD could recover strongly in the short term, due to the market’s excessive expectations for the easing of US monetary policy, along with the upcoming presidential election. in November.

According to foreign exchange market data, the won traded at 1,310.60 won/USD on September 30, significantly stronger than the level of about 1,390 won/USD recorded in mid-June.

The won lost the threshold of 1,400 won/USD on April 16 due to the impact of escalating conflict in the Middle East. The won fell to its lowest level in 17 months, breaking the important threshold of 1,400 won/USD, making many people worried, because 2 of the 3 previous occurrences were related to full-blown economic crises.