[환율전망] Safe assets preferred due to European blockade measures and deteriorating U.S.-China relations… 3 won increase start

On the 24th, exchange rate experts predicted the strength of the dollar due to concerns about the spread of the third new coronavirus infection (Corona 19) in Europe, despite the fall in US Treasury yields. The won-dollar exchange rate is expected to rise by 3 won to the beginning of the 1130 won range.

◇Yumi Kim, Researcher at Kiwoom Securities = The dollar rose due to a decline in the New York stock market, higher preference for safe assets in the financial market, and a weak euro due to concerns about European blockade measures.

Despite the fall in US Treasury yields, the New York Stock Market has strengthened the preference for safe assets in the financial market as concerns over the third corona epidemic in Europe have risen.

Due to concerns over the re-proliferation of Corona 19 in the eurozone, the blockade was strengthened, mainly in Germany and France. Germany extended the blockade until April 18, the Netherlands extended until April 20, France continued to restrict movement, and fears of delaying recovery in the eurozone’s economic recovery were weakening factors for the euro.

Overseas Futures Exchange (NDF) One-month won-dollar exchange rate is expected to start rising by 3 won to 1133.3 won, and upward pressure is expected to prevail due to the strong dollar.

◇ Seungji Jeon, Researcher at Samsung Futures = The US dollar has risen in major currencies due to concerns about the re-proliferation of Corona 19 and the preference for safe assets due to tensions between the US and China.

Tensions between the US and China are fatal and are likely to continue, but as the Biden administration focuses on efforts to shorten the economic recovery cycle this year and response to economic issues between the US and China is expected to be limited, the weakening pressure on the yuan is likely to weaken.

However, as China has shown a willingness to regulate the pace of the renminbi’s appreciation, volatility in related news may increase in the short term.

Despite the stabilization of U.S. Treasury yields, rising pressure on the won-dollar exchange rate is likely due to the re-proliferation of Corona 19 and tensions between the US and China. As tensions rise between Western countries and China, Seoul’s exchange rate is likely to be conscious of the renminbi exchange rate for the time being.

On this day, amid the renminbi exchange rate and risk-averse atmosphere, we expect the trend of foreigners in the Korean stock market and the stock market to fluctuate around the early 1130 won range.