"The fact that won has seen minimal impact from the geopolitical tensions in Ukraine, shrugged off reports last week that North Korea may be preparing another nuclear test, and ignored the North's live-fire drill near the border, is testament to the won's safe-haven status in the region," said Khoon Goh and HuiYing Chan, senior forex strategists at ANZ.
But while HSBC remains bullish on the currency, ANZ believes the won's appreciation is overdone.
"The won is looking stretched in real exchange rate terms, especially against the yen. Once month-end flows are out of the way, we expect some correction in the currency over the month of May, which historically tends to occur," continued Goh and Chan.
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South Korean equities saw nearly $3 billion in foreign inflows during April and according to ANZ, the won has typically seen a correction when some of those equity flows are unwound.
"While April is a seasonally strong month for the won, the month of May tends to be less kind. USD/KRW has risen for the past four consecutive years in May. While past performance is no indication of future performance, the historical pattern at least points to a decent chance of a correction in the won during May," the ANZ analysts said.