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17 Apr 2013
Forex Flash: Doomsday scenario breaking out in Korean peninsula unlikely – ANZ
FXstreet.com (Barcelona) - Geopolitical tensions in the Korean Peninsula have been a major reason why the Korean won has been the worst performing Asian ex-Japan currency year-to-date. Threats from the North keep coming, almost on a daily basis, but its effect is starting to wear thin on the market.
There are reports that the North could launch a missile test, but this has now been discounted by the market and would not be a major surprise if it were to occur. “Though Pyongyang has rejected calls by the US to return to dialogue (under certain conditions), we think the only way for tensions to escalate further from here is for there to be an actual military conflict. While we can never rule such a scenario out, the probability of this occurring is low, in our view, and would only result from a miscalculation from either side.” writes Khoon Goh, Senor FX Strategist at ANZ.
There are reports that the North could launch a missile test, but this has now been discounted by the market and would not be a major surprise if it were to occur. “Though Pyongyang has rejected calls by the US to return to dialogue (under certain conditions), we think the only way for tensions to escalate further from here is for there to be an actual military conflict. While we can never rule such a scenario out, the probability of this occurring is low, in our view, and would only result from a miscalculation from either side.” writes Khoon Goh, Senor FX Strategist at ANZ.