Daum Securities: The listing of SK Hynix ADR brings a boost in related fund flows, but the Korean won is expected to continue its weakening trend.

Daewoo Securities stated that although this week's record ADR listing of SK Hynix boosted the Korean won, the won may still remain weak due to the overall strength of the US dollar. Howard Du and other strategists at Daewoo Securities wrote in the report that they expect the US dollar to remain strong until US economic data shows weakness, leading to a dampening of expectations for a Federal Reserve interest rate hike; recent trends suggest that any significant rebound of the Korean won only occurs when the US dollar is overall weak. The report mentioned that net stock investments flowing out of Korea into the US have been a factor putting pressure on the won this year, but this trend seems to have stabilized in recent weeks, allowing the won to rebound in July. The key level to watch is the 1493-1494 area for the USD/KRW pair; if the exchange rate continues to remain above this level in the coming week, investors expecting the US dollar to continue its upward trend should buy US dollars near this level.