DS Investment & Securities: "Strong Yuan Trend Could Benefit South Korea"

DS Investment & Securities analyzed on April 28 that the strong yuan trend could benefit South Korea.

Yang Hyejeong, a researcher at DS Investment & Securities, stated in the report "Opportunities Created by Gaps in Tariff Negotiations" released that day, "The trade negotiations that began with the United States imposing tariffs also included adjustments related to exchange rates. The yen, for which negotiations started first, is showing a strengthening trend. While interest rate hikes have had an impact, the yen, which had been artificially weakened under Abenomics, is now unlikely to weaken further."

She continued, "This time, the yuan is the most important currency in relation to tariff negotiations. Although the yuan is not following a weakening trend as it did in the past, and since negotiations are still ongoing it is too early to draw conclusions, I believe there will definitely be an adjustment in the value of the yuan in this case."

Yang predicted that the recent strong yuan trend could be an opportunity for South Korea. She explained, "While the won may undergo value adjustments against the dollar during the negotiation process, if the strong yuan trend is clear, it will certainly be an opportunity for South Korea. Since the bottom has been confirmed during the tariff shock, I believe the upward trend can continue."

She added, "If even the yen maintains a strengthening trend, the environment will become even more favorable. Since the bottom has been confirmed during the tariff shock, I believe the upward trend can continue."