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BofA Expect North Asia FX Weakness To Persist In H222

ASIA FX

Bank of America note that “the combination of aggressive Fed hikes, portfolio outflows and collapse in demand from mainland China has resulted in the year-to-date underperformance of the KRW, TWD and HKD. Despite USD stabilizing, we don't see many triggers for a rebound in North Asian currencies unless the risk environment significantly improves. We see further upside to local USD pairs and expect USD/KRW, USD/TWD and USD/HKD to end the year at KRW1,350, TWD30.5 and HKD7.85, respectively. For Korea and Taiwan, the increasing FX weakness is filtering into domestic price and will be an important topic for their central banks in H222.”

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Bank of America note that “the combination of aggressive Fed hikes, portfolio outflows and collapse in demand from mainland China has resulted in the year-to-date underperformance of the KRW, TWD and HKD. Despite USD stabilizing, we don't see many triggers for a rebound in North Asian currencies unless the risk environment significantly improves. We see further upside to local USD pairs and expect USD/KRW, USD/TWD and USD/HKD to end the year at KRW1,350, TWD30.5 and HKD7.85, respectively. For Korea and Taiwan, the increasing FX weakness is filtering into domestic price and will be an important topic for their central banks in H222.”