USD/KRW remains bid after BOK stands pat on interest rates
- USD/KRW has barely moved in response to BOK's status quo rate decision.
- The central bank cut rates in July and October and is now on a wait-and-watch mode.
Korean Won (KRW) is not impressed by the Bank of Korea's status quo rate decision.
The central bank kept the seven-day repurchase rate unchanged at 1.25%, having reduced rates in July and October. Essentially, the bank is on a wait and watch mode and intends to assess the effects of the recent easing on the economy battered by the Sino-US trade tensions.
A status quo decision was expected and has so far failed to move the needle on interest rates. At press time, the USD/KRW pair is trading at 1179, representing marginal gains on the day.
Governor Lee Ju-yeol is due to hold a news conference at 0220 GMT when he is expected to offer insights on the next possible move and publish the revised 2019-2020 economic growth and inflation forecasts.
Korean Won will likely come under pressure, pushing USD/KRW to the 100-day average resistance at 1,186 if the Governor talks dovish, reviving bets for deeper rate cuts in 2020.
That said, the expectation for a further rate cut would remain high until clear evidence emerges to show the economy is firmly on a rebound, according to Paik Yoon-min, fixed-income analyst at Kyobo Securities.