[Edaily Reporter Lee Jeong-yoon ] Market expectations for next year’s won-dollar exchange rate are falling to the 1,200 won range. With the exchange rate having dropped sharply in the second half of this year—recent levels have fallen to 1,320 won—market analysts suggest the won still has room to strengthen further next year.

However, opinions on the exchange rate’s future direction vary widely, ranging from expectations that it will stabilize in the 1,200 won range to forecasts predicting a rebound to the 1,400 won range. The key question is how much the supply of dollars generated by the semiconductor boom will outweigh the demand for overseas investment from “individual investors” and the pressure from U.S. monetary tightening.

◇ Dollars Flooding In Due to the Semiconductor Boom… Expectations for a Move into the 1,200-won Range

On the 2nd, E-Daily analyzed the 2027 exchange rate forecasts from 10 domestic securities firms and found that seven of them suggested the possibility of the rate entering the 1,200 won range next year. Among these, four projected a quarterly average exchange rate in the 1,200 won range, while three cited the 1,200 won range as the annual low or within the expected exchange rate range.

iM Securities projected the lowest annual average exchange rate at 1,280 won. On a quarterly basis, it forecast the rate would fall to 1,265 won in the second quarter before rebounding slightly to 1,290 won by year-end. The analysis suggests that a dollar supply surplus will persist next year, as the current account surplus is expected to reach $440 billion, driven by strong semiconductor exports.

Hanwha Investment & Securities projected that next year’s exchange rate would average 1,350 won in the first quarter, drop to 1,300 won in the second quarter, and then fall further to 1,280 won in the third quarter and 1,270 won in the fourth quarter. The annual average exchange rate was forecast at 1,300 won. The firm anticipated that an improvement in the global manufacturing sector and increased semiconductor exports would boost the supply of dollars in the foreign exchange market.

Choi Kyu-ho, an analyst at Hanwha Investment & Securities, explained, “As corporate dollar holdings have swelled significantly, there remains a substantial amount of ‘nego’ (dollar selling) supply that could still enter the market.”

Kyobo Securities projected an average of 1,280 won for the second quarter, while KB Securities forecast an average of 1,280 won for the fourth quarter. Daishin Securities predicted that the exchange rate would attempt to enter the 1,200-won range in the first half of next year, as a massive trade surplus outweighs capital outflows from overseas stock investments, compounded by a weakening dollar.

◇Timing of the Lowest Point Divided Between First and Second Halves… AI Growth Slowdown and Overseas Investment as Variables

Opinions were divided on when the won’s strength would be most pronounced. Six out of 10 institutions expected the exchange rate to hit its lowest point in the first half of the year, while four predicted it would occur in the second half.

Institutions forecasting a strong won in the first half of next year highlighted foreign exchange demand stemming from exporters’ dollar sales and corporate tax payments. Kiwoom Securities noted that while the exchange rate may temporarily dip below 1,300 won at the beginning of the year, expanded overseas investment and relatively robust U.S. growth will subsequently drive a rebound in the exchange rate.

Shinhan Investment Securities also projected that the exchange rate would rise from an average of 1,300 won in the first quarter to 1,370 won in the fourth quarter. Their analysis suggests that while corporate demand for dollar conversion will support the won’s strength in the first half, the exchange rate could rebound in the second half as trends in domestic and international corporate earnings and the flow of investment capital shift.

Conversely, Hanwha Investment & Securities and KB Securities, among others, expected the exchange rate to fall further as the supply of dollars driven by strong semiconductor exports continues through the end of the year.

However, the possibility of a stronger dollar—driven by expanded overseas investments by pension funds, individual investors, and institutional investors, as well as further monetary tightening in the U.S.—is cited as a factor that could push the exchange rate higher. In particular, there are concerns that if the semiconductor boom slows, export growth and the supply of dollars will weaken, potentially halting the won’s appreciation trend.

Kim Ho-jeong, an economist at Yuanta Securities, predicted, “If credit risks related to AI investments are reassessed, next year’s export growth rate could drop from the baseline forecast of 15.5% to 11.5%, and the fourth-quarter exchange rate could reach around 1,350 won—higher than the baseline forecast of 1,300 won.”

Some analysts, anticipating a slowdown in AI-driven growth next year, predict that the exchange rate will actually rise. SangSangIn Securities, noting that South Korea’s growth slowdown is expected to be more severe than that of the U.S. and that the supply of dollars will be limited, forecast an annual average of 1,400 won—the highest among the 10 institutions surveyed. On a quarterly basis, the firm projected a steady upward trajectory, ranging from 1,370 won in the first quarter to 1,440 won in the fourth quarter.