South Korean Won: Undervaluation and BOK outlook aid won – BBH
The post South Korean Won: Undervaluation and BOK outlook aid won – BBH appeared on BitcoinEthereumNews.com. Brown Brothers Harriman’s (BBH) Elias Haddad highlights an extended broad rally in South Korean Won (KRW) as Korean equities underperform, reducing rebalancing outflows. Haddad sees an encouraging outlook, with KRW about 11% undervalued on Real Effective Exchange Rates (REER) metrics and the Bank of Korea (BoK) poised to start hiking at its July 16 meeting. A new 24-hour onshore KRW market and a roadmap for won internationalization should bolster long-term demand. Rebalancing, hikes and internationalization “KRW broad rally extended, mirroring the underperformance in the KOSPI so far this month. The logic is that as Korean equities underperform and their weight in global portfolio declines, the need for foreign investors to trim positions and repatriate funds diminishes, reducing KRW outflows.” “By the same token, should the KOSPI regain leadership the rebalancing outflows are l