USD/KRW rises to key price as South Korean chip boom continues
- The USD/KRW exchange rate continued rising on Friday.
- South Korea’s semiconductor boom continued in February.
- There is a risk that about the housing sector as prices crash.
The USD/KRW exchange rate rose to its highest level since November 1st after the strong South Korean semiconductor data. It also rose to a high of 1,352 after the latest South Korean retail sales and industrial production data.
South Korea chip boom
Copy link to sectionThe South Korean economy is benefiting from the ongoing semiconductor boom as the artificial intelligence (AI) boom continues.
Data by the government showed that the country’s chip production soared by 16% in February, the biggest increase since 2009. These shipments rose by 59% in February after increasing by 62.7% in the previous month.
The semiconductor industry is a pivotal market for semiconductors since it is the second-biggest player in the world after Taiwan. The most notable companies in the industry are Samsung, SK Hynix, and SK Square.
Meanwhile, further data revealed that South Korea’s industrial production bounced back in February. It rose by 3.1% in February after crashing by 1.5% in January. This increase was higher than the median estimate of 0.5%.
The country’s industrial production rose by 4.8% on a YoY basis, lower than the expected 5.8%. In the services sector, output rose by 0.7% after contracting by 0.2% in the previous month. These numbers mean that the economy is doing modestly well.
Still, there are several risks to the economy. For example, the housing sector is going through a major slump as delinquencies rise. The delinquency rate jumped to 2.7% in the fourth quarter from a low of 0.4% in 2021.
At the same time, house prices have continued falling while sales took a sharp reverse in December after rising for five straight months. Analysts believe that this trend will continue for a while now that the central bank has left rates at the elevated level of 3.5%.
USD/KRW technical analysis
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The USD to KRW pair has been in a strong bullish trend in the past few days. It has remained above the ascending trendline, which connects the lowest swings since February 2023. The pair has also drifted above the 50-day moving average while the MACD has crossed the neutral point.
Most importantly, the USD/KRW has formed an ascending triangle pattern whose upper side is at 1,352. Therefore, the outlook for the pair is extremely bullish, with the next point to watch being at 1,380. This view will be confirmed if it moves above the key resistance at 1,352.
