South Korean Won Remains Under Pressure

The South Korean won fell to around 1,495 per dollar, staying under pressure amid ongoing uncertainty over US-Iran tensions. The currency remains highly sensitive to developments in the Middle East, as US threats of strikes on Iranian energy infrastructure and Iran’s warnings over regional energy routes maintain elevated safe-haven demand for the dollar. While oil prices eased slightly following news of delayed US strikes, continued volatility in crude markets weigh on the won, reflecting Korea’s heavy reliance on imported energy. Elevated energy costs and broader inflation concerns are reinforcing investor caution, limiting the won’s ability to sustain a meaningful recovery. Foreign flows also contribute to downward pressure, as investors remain hesitant amid risk-off sentiment in Asian markets. Market participants are monitoring both geopolitical developments and energy price trends closely.

The South Korean won fell past 1,500 per dollar, marking its weakest level since March 2009, as escalating US–Iran tensions rattled markets. The US set a 48-hour deadline for Tehran to reopen the Strait of Hormuz, warning that failure could trigger strikes on Iranian energy facilities, while Iran threatened regional energy and water infrastructure and said it could close the strait if attacked. Risk-off sentiment was compounded by foreign selling of local assets, with net outflows totaling 1.8 trillion won, keeping downward pressure on the currency. South Korea’s heavy reliance on energy imports amplifies the impact of oil price spikes, while broader Asian market weakness, including sharp losses in the KOSPI, further boosted safe-haven demand for the US dollar. The government and ruling party are preparing a 25 trillion-won supplementary budget to cushion the economy from rising energy costs and support vulnerable groups.

The South Korean won hovered around 1,495 per dollar, stabilizing on cautious optimism as external pressures from energy markets and geopolitical tensions began to ease. Market sentiment improved as oil prices retreated, with US benchmark crude, West Texas Intermediate, falling below $95 per barrel amid easing concerns over further escalation in the Middle East. President Donald Trump said the United States was “not putting troops anywhere,” easing concerns over direct involvement. Meanwhile, Benjamin Netanyahu indicated that Israel would refrain from additional strikes on Iranian energy infrastructure, helping to reduce fears of prolonged supply shocks. Earlier this week, Finance Minister Koo Yun-cheol stated that they are ready to deploy all available tools, with continuous monitoring of forex markets and potential intervention if needed. Authorities and the BOK also plan stress tests and may expand a KRW 100 trillion stabilization program to support the financial system.