Since the Korean won is sensitive to both higher oil prices and potential USD funding squeezes, analysts at Credit Suisse think USD/KRW will rise toward 1,250 as the conflict in Ukraine drags on.
Rising energy prices point to weaker KRW
“As Russia sanction uncertainty persists in the near future, we expect USD/KRW to continue rising toward 1,250.”
“Higher nominal imports due to the increase in energy prices, along with a stronger USD/hawkish Fed point to won weakness against the dollar.”