South Korean Won Retreats on US Tariff Threats

2026-01-27 02:24 By Erika Ordonez 1 min. read

The South Korean won weakened to around 1,450 per dollar, reversing gains from the previous session, pressured by renewed US tariff threats and persistent domestic dollar demand.

The currency came under strain after US President Donald Trump unexpectedly announced a raise on auto and reciprocal tariffs on South Korean imports to 25% from 15%, reviving concerns over Korea’s export outlook and bilateral trade uncertainty.

The announcement weighed on market sentiment, dragging auto and battery shares lower and prompting FX hedging flows as investors reassessed risks to growth and cross-border investment plans.

At the same time, sustained domestic demand for foreign currency reinforced the won’s weakness, as foreign currency deposits rose to a record high amid elevated exchange-rate volatility.

The buildup in dollar holdings by corporates and households has limited selling pressure on the greenback, keeping the won under strain despite authorities’ verbal intervention.



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