Grinding weakness in KRW likely in 2016

KRW is one of the biggest potential losers from continued JPY and CNY weakness, which is expected. South Korea has the highest export correlation and lowest export complementarity with Japan and China. 

BoK forecasts inflation of 0.9% this year and 1.8% in 2016. There is downside risk to the 2016 projections. In early September, Finance Minister Choi Kyung-hwan announced the government had cut its forecast for growth in 2016 from 3.5% to 3.3% due to risks from China's slowdown. 

"The grinding weakness for KRW is anticipated after a period of consolidation in the shorter-term", says RBC Capital Markets.