Forex Flash: Korean tensions at impasse, risk premium to unwind – ANZ

FXstreet.com (Barcelona) - Though North Korea continues to make threats towards the South, it is hard to see how much further tensions can escalate from here, short of an actual conflict developing. According to Senior FX Strategist Khoon Goh at ANZ, “We believe markets are starting to take the view that the worst is over, and that the geopolitical risk premium will gradually unwind.” Given that market positioning is still short KRW, there is scope for further gains in the won as these positions get squared up. Seasonal factors also support a rebound in won during the remainder of April.

“We recommend selling 3m USD/KRW NDF at 1121.1 (spot reference 1117.2), targeting 1080 with stop-loss at 1135.” Goh adds.