HSBC strategists say the USD/KRW upward trend that began in 2021 has come to an end, driven by South Korea's record current account surplus this year. Joey Chew, head of foreign exchange research in Asia, said in a report on September 7 that the bank lowered the USD/KRW forecast for the end of 2026 and mid-2027 from 1500 to 1320 and 1280, respectively. According to data from January to July, the current account surplus reached $400 billion in annualized terms, which was a “disruptive” factor for this exchange rate. This figure exceeds the cumulative surplus of 360 billion US dollars from 2021 to 2025. The booming AI and chip industry is expected to have stronger domestic spillover effects through huge capital expenses, employee bonuses, shareholder returns, and tax expenses. The resulting foreign exchange, along with the Bank of Korea's 50-base-point monetary policy tightening and fiscal consolidation since July, should provide structural support for the Korean won. If the de-dollarization process accelerates or the yen continues to recover, the won may appreciate more rapidly, and risk will increase accordingly.

HSBC strategists say the USD/KRW upward trend that began in 2021 has come to an end, driven by South Korea's record current account surplus this year. Joey Chew, head of foreign exchange research in Asia, said in a report on September 7 that the bank lowered the USD/KRW forecast for the end of 2026 and mid-2027 from 1500 to 1320 and 1280, respectively. According to data from January to July, the current account surplus reached $400 billion in annualized terms, which was a “disruptive” factor for this exchange rate. This figure exceeds the cumulative surplus of 360 billion US dollars from 2021 to 2025. The booming AI and chip industry is expected to have stronger domestic spillover effects through huge capital expenses, employee bonuses, shareholder returns, and tax expenses. The resulting foreign exchange, along with the Bank of Korea's 50-base-point monetary policy tightening and fiscal consolidation since July, should provide structural support for the Korean won. If the de-dollarization process accelerates or the yen continues to recover, the won may appreciate more rapidly, and risk will increase accordingly.