KRW likely to continue trading in range of 1,110-1,140 along with pullback in Kospi share index, says Scotiabank

The South Korean won is expected to continue trading in a range of 1,110-1,140 after declining along with a pullback in the Kospi share index, according to the latest research report from Scotiabank.

It was broadly reported that North Korea has begun rebuilding a rocket launch site that had been partially dismantled as a goodwill gesture after the first summit between US President Donald Trump and North Korean leader Kim Jong-un in June 2018.

The development came days after the second Trump-Kim Summit ended without any agreement in Hanoi on February 28. US President Trump said at the White House on Wednesday that he would be very disappointed in North Korean leader Kim Jong-un if reports about rebuilding at a rocket launch site in North Korea were true.

Renewing geopolitical risks on the Peninsula haven’t sparked market panic as South Korea’s sovereign CDS premium remains low. US President Trump said Wednesday it is a very early report and he will see what happens.

"In our view, it may be a strategy aimed at imposing pressure on the US to reach a deal rather than a move to resume missile tests there," Scotiabank further commented.

"Meanwhile, we keep a close eye on geopolitical situation as it would weaken the KRW abruptly should North Korea resume its missile/nuclear tests," the report added.