Won Tests 1560 Level as AI Hopes Clash with Geopolitical Risks in Financial Markets

The dollar-won exchange rate is threatening the 1,560 won level, and semiconductor stock prices have fallen sharply in US markets. The financial markets are facing significant changes as expectations for artificial intelligence (AI) technology development intertwine with the risk of inflation driven by heightened global tensions.

On the 6th, Sangsangin Securities analyzed the recent widening of stock market volatility and the sharp depreciation of the won in its weekly strategy report. The report concluded that financial markets have entered a transitional phase where expectations for AI growth are clashing with geopolitical inflation risks. Overnight, the Philadelphia Semiconductor Index plunged over 10% in New York trading, while the dollar-won exchange rate surged to 1,559 won in the foreign exchange market. Sangsangin Securities pointed out that a combination of large-scale net selling of stocks by foreign investors and a shortage of dollar inflows into Korea is leading to the won's vulnerability against Asian currencies.

Sangsangin Securities anticipates that the momentum for stock market rallies will be limited for the time being. Strengthening portfolio defense and adopting tactical responses to hedge against macro volatility are necessary. Sangsangin Securities estimates that the US Consumer Price Index (CPI) for May, to be released next week, will rise by around 4.1% year-on-year. If sticky inflation is confirmed again, concerns about prolonged tightening by the Federal Reserve (Fed) could grow. Amid retreating expectations for Fed rate cuts due to robust employment data (May non-farm payrolls increased by 172,000), inflation in the 4% range has acted as a burden on the market.

The impending Nasdaq listing of SpaceX on the 12th is also a key variable for stock market supply and demand. It has been analyzed that SpaceX's listing, estimated to be worth approximately $1.8 trillion, could amplify short-term market volatility by absorbing global passive funds and ready liquidity. Analyst Shin suggests that a flexible strategy focused on responding to events such as the US CPI, Apple's Worldwide Developers Conference (WWDC), and the SpaceX listing, rather than index tracking, is required.