Societe Generale Lead Asia Macro Strategist Seong Ki-yong poses at Woori Global Markets Asia in Hong Kong, Nov. 12. Joint Press Corps

HONG KONG — Donald Trump's victory in the U.S. presidential election has sent the won-dollar exchange rate soaring, breaking the 1,400 won ceiling. While short-term volatility is expected to persist, investment strategists in Hong Kong suggest that the weak won will stabilize in the near future and will not surpass the 1,450 won level.

Analysts noted that the market has already priced in significant volatility and that the Korean won is showing strength against the Chinese yuan — a marked contrast to the situation during Trump's first administration.

"It's inevitable for the won-dollar exchange rate to surge beyond the 1,400 won range. However, it is unlikely to exceed 1,420 to 1,430 won, or even approach 1,450," Seong Ki-yong, lead Asia macro strategist at Societe Generale, said in a joint interview with Korean media outlets on the sidelines of the Financial Supervisory Service's Hong Kong investor relations event.

"The won is expected to stabilize relatively quickly, with its depreciation likely to moderate significantly."

Seong said that Trump's 2016 election victory had been difficult to predict and was not factored into market behavior in advance. This time, however, Trump's reelection was widely anticipated, so the market impact is expected to be less severe compared to his first term.

"After having reflected a significant increase in tariffs in advance, the market is expected to continue the strategy of fine-tuning their position following one or two tariff increases over the next three to four months," Seong noted.

The dollar strengthened in 2018 when the United States implemented tariff hikes primarily targeting China, while the yuan and other Asian currencies showed signs of weakening.

"In the early stages, it is unavoidable for market volatility to move in tandem. However, looking at last weekend's (Nov. 9 and 10) exchange rates, the yuan appears to be weakening more than the won," Seong said.

"Over the past year or two, the won has typically shown an unusually weaker trend against the yuan. However, moving forward, I believe the environment is shifting to one where the won may hold up slightly better than the yuan."

Credit Agricole Emerging Market Analyst Kim Yeon-jin poses after the interview at Woori Global Markets Asia in Hong Kong, Nov. 12. Joint Press Corps

Kim Yeon-jin, an emerging market analyst at Credit Agricole, agreed that the impact of Trump's tariffs has largely been priced in.

"Given that Korean companies have established numerous factories in the U.S., the effect of tariffs is expected to be less significant compared to Trump's first term," Kim said. "As for exchange rates, uncertainties surrounding how Trump will implement tariffs could cause additional market fluctuations when relevant news surfaces."

They suggested that global investment banks are likely to adjust their growth rate forecast on both China and Korea due to the election results and the recent stimulation measures by Chinese government.

"We are considering lowering China's growth forecast," Seong said. "Korea also cannot rule out the possibility of an overall downward adjustment if Trump raises tariffs."

"The market had expected the Chinese government's stimulus measures to focus on boosting consumption, but disappointment arose as the measures were largely directed toward addressing local government debt," Kim said. "If the Chinese government introduces additional stimulus measures, some of the negative impacts could be offset."

They also expressed disappointment regarding the Corporate Value-up Program, the government-led initiative to enhance corporate governance and shareholder returns.

"Both voluntary efforts to enhance corporate governance and strong policy-driven initiatives are essential, but the current efforts fall short of market expectations," Seong said. "There haven't been many noticeable or significant visible outcomes yet."

Kim also advised applying more pressure on companies to actively communicate with foreign investors and drive meaningful changes. "Providing real-time disclosures in English to reduce barriers for foreign investors is also crucial," she said.