Shinhan sees USD/KRW near 1,300 in Q1 2027, rising to 1,390 by year-end

Shinhan Securities expects USD/KRW to reach around 1,300 in the first quarter of 2027 before rising to 1,390 by year-end. Its Nov. 6 currency outlook argues that AI-related trade and equity flows now influence the won more than interest-rate differentials do.

The forecast puts USD/KRW at 1,320 at the end of the second quarter and 1,360 at the end of the third. Those are quarter-end estimates; the report separately projects quarterly averages of 1,300, 1,310, 1,340 and 1,370, with a full-year average of 1,330.

Why would AI flows matter more than rate gaps?

During periods of technological change, the analysts argue, currencies become more sensitive to which countries are expected to capture future profits. Their focus is on the conversion of trade receipts and the allocation of equity capital along the AI supply chain.

The report argues that changes in inflows matter more than their absolute size. It separately stresses their composition: in the mid-2000s, record inflows into US assets were concentrated in bonds while the dollar weakened.

What supports the won early in 2027?

Semiconductor companies are expected to convert dollar receipts into won to fund bonuses and corporate tax payments. Those conversions would support the currency alongside monetary tightening: the FX chapter assumes two 25-basis-point Bank of Korea hikes, in November 2026 and February 2027.

The broader economic outlook forecasts Korean growth of 3.0% in 2027, with semiconductor profits feeding through to investment, government revenue and employee bonuses.

A rate near 1,300 would nevertheless be below the report’s estimated medium- to long-term USD/KRW equilibrium in the low 1,400s. That estimate rises over time as expanding Korean investment overseas creates dollar demand.

Why does the forecast reverse later?

Shinhan expects KOSPI earnings growth to fall below that of the S&P 500 in the second half of 2027. In the analysts’ scenario, capital gradually shifts towards US equities, contributing to the rise in USD/KRW to 1,390 by year-end.

The brokerage projects a broadly flat dollar index for 2027, including a 1.7% rise in the second half. Annual-average forecasts for other currencies are $1.13 per euro, 149 yen per dollar and 6.68 yuan per dollar.

Delayed returns on AI investment are a separate risk in the economic outlook. The report warns that credit stress could spread beyond AI if those delays coincide with reduced lending capacity at financial institutions.

What did Shinhan report on Nov. 6?

In its Nov. 6 FX Check-up, the brokerage describes USD/KRW fluctuating in the 1,340s before rising to the high 1,350s. Its analysts attribute the move to weaker US AI and semiconductor shares, risk aversion and foreign equity outflows from Korea, which outweighed exporters’ dollar sales.

For the near term, that report expects AI investment sentiment and foreign equity flows to drive the pair, with exporter dollar sales limiting increases.

The government reported strong October export growth, while Shinhan remained cautious about the breadth of demand recovery. The official release recorded a 93.7% year-on-year increase and growth in 18 of 20 major product categories. In the Econ Check-up, the brokerage’s economists judged exports outside data-centre investment-related categories to be weak, limiting evidence of a broad demand recovery.