Monetary policy divergence likely to remain an important driver for AXJ currencies

Standard Chartered notes...

• We expect monetary policy divergence to remain an important driver for AXJ currencies. 
  
  
• In the past week alone, the Bank of Thailand (BoT) and the Bank of Korea (BoK) have 'surprised' markets by easing monetary policy, joining the long list of Asian central banks to have eased policy this year. 
  
  
• We expect USD divergence to weigh on the KRW as the Fed hikes rates in H2-2015. 
  
  
• However, we also forecast no more cuts, barring further domestic deterioration given the BoK Governor Lee's note that the BoK cut was a pre-emptive action. 
  
  
• As a result, we upgrade our short-term KRW weighting to Neutral from Underweight.