South Korean Won Hits 4-Week High

The South Korean won strengthened to around 1,437 per dollar, recovering from a brief dip in the previous session to a four-week high as government initiatives to attract foreign investment bolstered market sentiment. The currency’s rise coincided with a historic surge in the local stock market, which recently reached a market capitalization of $3.76 trillion. Lee Chan-jin, governor of the Financial Supervisory Service, told executives from 10 international institutions that authorities are implementing measures, including steps toward MSCI index inclusion, to further strengthen the domestic capital market. Investors are now turning their attention to the Bank of Korea’s policy meeting on February 26, 2026. Market consensus anticipates that the central bank will hold the base rate steady at 2.50%, as policymakers weigh current economic momentum against inflation and growth trends.

The South Korean won eased to around 1,446 per dollar, retreating slightly from the previous session, as renewed US tariff threats pressured the currency. Investor caution intensified after Washington signaled it could pursue broader trade actions, including potential Section 301 investigations, raising concerns that Korea’s key exports such as automobiles and semiconductors could face additional scrutiny. The prospect of heightened trade frictions clouded the export outlook and weighed on the won. Meanwhile, the Bank of Korea is widely expected to keep its base rate unchanged at 2.50% this week, marking a sixth consecutive hold. Analysts also anticipate upward revisions to the 2026 growth and inflation forecasts, supported by robust chip exports and firmer domestic demand. Some economists suggest the next policy move is more likely to be a rate hike than a cut, helping anchor yield support for the won and limiting deeper losses.

The South Korean won rose to around 1,444 per dollar, extending gains from the previous session as broad dollar softness lifted regional currencies including the won. The greenback weakened after a ruling by the US Supreme Court limited President Donald Trump’s use of emergency tariff powers, heightening policy uncertainty and raising the prospect of tariff refunds. Additionally, the won benefited from strong semiconductor-linked momentum and record equity gains in major exporters, reinforcing expectations of sustained export inflows. However, the currency’s upside remained capped after President Trump announced new global tariffs, including a 15% levy that broadly aligns with previously discussed rates. Investors continued to monitor the risk of potential sector-specific measures targeting autos or semiconductors, which could pose downside risks to Korea’s trade surplus and capital flows.