DOJ Ends Probe Into Fed Chair Jerome Powell, Boosting Kevin Warsh Confirmation Prospects 
ECB Signals Possible Interest Rate Move if Inflation Outlook Fails to Improve 
RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
Moody's Upgrades Argentina's Credit Rating Amid Economic Reforms 
U.S. Banks Report Strong Q4 Profits Amid Investment Banking Surge 
Geopolitical Shocks That Could Reshape Financial Markets in 2025 
AI-Driven Inflation Raises U.S. Consumer Prices, Goldman Sachs Says 
US Gas Market Poised for Supercycle: Bernstein Analysts 
FxWirePro: USD/ZAR gains some upside as rand weakens after sour local jobs data 
Trump’s "Shock and Awe" Agenda: Executive Orders from Day One 
Bitcoin Holds Steady Near USD 80k as the CLARITY Act Heads for a Decisive Senate Vote 
China's Refining Industry Faces Major Shakeup Amid Challenges 
BOJ Rate Decision in Focus as Yen, Inflation, and Nikkei Hang in Balance 
Will the Bank of Korea (BOK) initiate Asia’s rate hike cycle? The market thinks so. KRW strengthened by more than 1% against USD this week, with USDKRW touching its lowest level this year. The extraordinarily strong currency is largely due to rising expectations of a rate hike this month.
In fact, the latest BoK minutes showed that three of seven board members already voted for a hike at the last monetary policy meeting.
As the growth outlook continues to improve, and BOK governor Lee is widely seen as a “hawk”, the market has started to prepare for the first rate hike since 2011.
In addition, the IMF raised its growth forecast for South Korea this week, fueling rate hike speculation further.
As a result, bond yields are picking up across the board. On the back of rising rates and strong hedging needs from exporters, KRW will likely remain resilient over the short term.
Technical levels: Except for the late-week bounce, USDKRW has been the outlier as the heavy price action has resulted in a retest of critical support at the 1110/09 medium-term range lows.
With short-term momentum studies now oversold, we are closely monitoring for signs of a sustained reversal.
A push above the 1122/25 breakdown/pivot area would be the first bullish signal that the oversold setup is registering with the price action.
Options Strategy: Risk markets lurched lower this week amid thin summer liquidity as geopolitics took center stage. Without any edge in calling the outcome of the latest flare-up, our instinctive reaction is that this too shall pass as many other false alarms involving North Korea have before, and that investors can do worse than to position for an eventual retracement lower in USDKRW spot via net vol-selling option structures such as USD put/KRW call ratio spreads that earn decay while awaiting normalization and do no P/L damage if tensions escalate.
FxWirePro launches Absolute Return Managed Program. For more details, visit:
