[AUDKRW] Forex Forecast & Analysis - 2022 Q2

<This post will be updated till the end of June, 2022>

 

[25th June, 2022]

At least I can anticipate one thing. The present bank of Korea (or the government of Korea) will not raise that cash rate - to secure the real estate market price. If they raise it? That means their fixed capital asset become worthless. Their money will never come back and this create many social issues. What about inflation? The hyper-inflation matter? Due to the peace of real estate market may be their top priority, the cash rate will probably not increase that rapid than you expected.

 

As I mentioned, see the Korean news articles first. They will directly express the government's will.

To see the situation? Look at the KOSPI and Korea's major industry conditions like semiconductors and manufacturers.

Let's see how the hell this government would respond to the following disaster. The circus has not even started yet.

 

Remember, more political vengence means; the current government is doing their best to avoid the public's criticism regarding the present economy.

 

Next forecast:

1. Hyper-inflation kills CPI index.

2. Dreadful crude oil price.

3. Lots of medical bill issues due to another wave of pandemic in Q3, 2022.

 

[17th June, 2022]

US bank raised interest rate by 0.75%. That's quite a huge.

Despite that, the whole nations face quadratic problems. Food, climate change, unstable income, huge debt.

The situation is obvious. Safe money is the trend now. However, this does not mean the Aussie dollar went higher. This is probably due to the poor performance and its recovery from South Korea's economy.

 

The aussie dollar won't go higher than I expected. Let's assume it would be no higher than 910 won, for now.

 

[1st June, 2022]

Inflation hit 5.1%. Obviously higher than its target range, 2-3%.

There is no reason for RBA to take another expansionary monetary policy.

The major reason to hike the current cash rate is due to their GDP growth expectation, which betrayed RBA's anticipation.

 

It just outnumbered by 0.8%. That may sounds not necessary, but RBA made a decision.

Looks like there is some growing concern for the US dollars. If FED keeps the aggressive monetary policy over Q3, 2022: it is likely for Aussie dollar to take some action too.

 

Personally, I assume there is no good reason to trigger another hike for Aussie dollar at this point. It might due to war in Ukraine and rising concern for the food shortage issue in globe.

 

Let's not forget about some response from Europe too. Seems like they claim to say goodbye to Russian energy resources. And tension just mongering as expected. Meanwhile, most developing countries suffer a huge economic crisis amongst the pandemic, energy crisis, climate change and food shortage.

 

Whoop whoop, another wave incoming. Don't forget the natural disaster following this Summer. It will be much powerful than last year. And monkeypox is another threat but mild.

 

Another news? The pandemic is not over again. Yet, most of you assume it is over! Unless you want to dance with the coffin dancers in Ghana, be prepared. WHO said the wave of covid-19 omicron could hit the globe again.

Again, we need to correct this narrative that Omicron is mild. That narrative is really deadly because people think that they’re not at risk. We know consistently across countries that people with underlying conditions are at increased risk of severe disease but we have solutions for this because we have vaccines. Those vaccines have to be accessible to people so that they can be administered and save people’s lives.

We also have access to tests and early clinical care and all of these tools are saving lives. So, please, help us correct this narrative that Omicron is mild because it’s not. It can cause anything from asymptomatic infection, all the way to severe disease and death, and what we want to do is prevent infections.

Not only do vaccines prevent against severe disease and death, they also reduce the risk of developing post-COVID-19 condition. We cannot forget about the long-term consequences following infection and this is something that all countries need to consider in going forward. So, increasing vaccination coverage is key but also we have to take steps to reduce the spread and we have tools that can do that.

[8th May, 2022]

So, now it formed up some border level: 900 won = $1 AUD. As you thought, it is safe to assume that 900 won is kind of ceiling level, that hardly face some pressure if it does so. So far, US dollar is the major influence to trigger this high.

 

Then what now? We all do not know what may happen next. Theoratically, the next movement is to start depreciating by itself when the interest rate hikes. The important thing is now RBA also increased the cash rate by 0.25%. This signal will surely tackle on the current movement on that Aussie dollar.

 

Yet, no one knows when is the time to depreciate back to a normal form. But it is possible to assume that Aussie dollar will hardly hit 920 won. As always, cannot guarntee but I assume the aussie dollar will tend to depreciate by itself as time passes. Just don't know when that moment would be.

 

And there is more reason why Aussie dollar will eventually depreciate. China and Russia risk also negatively impact on their trading balance sheet. That would be a great reason to hold their currency.

 

[21th Apr, 2022]

Bank of Korea announced to increase the cash rate. This may ensure the present volatility.

Australia obviously do not welcome this current level of its exchange rate. Yet, they do not challenge to adjust their cash rate for now.

 

As you may aware, the climate change is the biggest matter to consider no matter whichever currency you concern.

This will be the biggest threat after or during this Summer.

 

[7th Apr, 2022]

One thing is obvious; Korean won value has been depreciated. That's the answer to your question.

 

Since intellectual laziness boss will be in chair of South Korea, after 10th of May, It is obvious the fate of Korean economy will fall - if they do not perform better than the previous. Being nationalism gives very clear pros and cons - it can stimulate targeted industry in short-term period yet this will require some sacrifice, like how our body uses adrenalin in case of urgency. 

 

Meanwhile, American businesses increasingly adopts four day business work time policy for each week. This is obviously to increase the work performance efficiency.

 

[5th Apr, 2022]

"The U.S. dollar traded in a tight range Tuesday, while the euro edged lower on talk of additional sanctions on Russia and the Australian dollar received a boost from a hawkish central bank.

 

Elsewhere, AUD/USD rose 0.9% to 0.7607, jumping to a nine-month high, after the Reserve Bank of Australia left its benchmark interest rate unchanged at 0.1% at its latest policy setting meeting, but indicated that rate hikes were coming.

 

Australia’s central bank dropped its pledge to be "patient" on tightening policy in its statement following the decision, a phrase that has featured in every post-meeting release since November 2021, suggesting that it is going to hike sometime soon."

source: https://finance.yahoo.com/news/dollar-edges-lower-ahead-fed-025848151.html

 

[Mar 21, 2022]

The aussie dollar will not change so rapidly after the RBA's statement regarding the cash rate decision. The RBA said it is too early to conclude whether they should raise its adjustment. The answer on March is - maintain the present rate. There should be no rapid change - yet we should not forget about the energy sanction against to Russia's war issue.

 

The global market fears the economy would turn into the stagnation due to the unstable crude oil price - as a result of sanctioning the made in Russia. In short-term, it is highly likely the commodity price in the market will definitely increase and the overall goods as well. Unless the government intervene its oil price - especially several Aussie power generators also rely on the oil resources, possibly another hit to this pandemic scar.

 

And we should not forget - either the Brisbane or Queensland suffered flooding disaster. And thanks to the climate change by human-hand, this Summer will be much more disastrous weather than ever. However, no one knows yet about this so let me talk about the currency price to sum up this post for now.

 

Looks like the aussie dollar somehow works as a save haven. The current dollar price might be the ceiling point and may have a high pressure to go above \900 = AUD $1. This is somewhat not friendly price for their trading yet still in their scenario.

 

It may be better to assume that Russian forces probably start declaring a total war against to Ukraine. This is the most significant risk factor - yet won't be that catastrophic since the market seem to brace for its impact.

 

1 March 2022 | Minutes of the Monetary Policy Meeting of the Board

 

<Disclaimer: the market changes every second and hence, the post you see now can be outdated information. You shall not fully rely on this post to make your decision to conduct any financial movement. I do not take any responsibility and this post shall be limited as an individual post on the blog.>