Goldman Sachs: A Better Week For The ‘Equity-Centric’ Won

Goldman Sachs note that the “KRW was the best performing currency in Asia last week as it benefitted from a global relaxation across assets and also a more specific relaxation across China and North Asian equities. This is consistent with research that suggests that KRW could be a beneficiary with greater portfolio flows into global equities. While the North Asian region saw equity inflows later in the week, foreign de-risking continued overall with net selling of regional equities week on week. On the domestic front, while our economists have revised down our growth forecasts given rising macro risks from Russia/Ukraine conflict and incrementally less expansionary fiscal policy following the victory of the Conservative party in the presidential election, we also think that the Yoon presidency is likely to press ahead with pro-business deregulation. Looking forward, the performance of the Won is going to remain closely tied to regional equity markets given its equity-centricity, and we remain more constructive on the currencies of South-east Asia which have greater exposure to commodities (MYR) and a gradual tourism re-opening (THB).”