South Korean Won Hits 17-year Low

The South Korean won traded around 1,345 per dollar, approaching its strongest level since October 2024, as record exports and a large trade surplus drove substantial dollar inflows. September exports surged 83.5% year-on-year to a record $120.9 billion, led by a 262.8% jump in semiconductor shipments to $60.3 billion, while the trade surplus widened to a record $49.85 billion. Additionally, consumer prices rose 2.9% year-on-year in September, and petroleum prices remained elevated, leaving limited room for near-term BOK easing. Meanwhile, US Treasury yields stayed near multi-decade highs, with the 10-year yield around 5.3% and the 30-year yield near 5.6%, keeping the dollar relatively firm at its highest level in over a year. At the same time, uncertainty surrounding Korea’s trade and investment commitments with the US has increased amid disagreements over Alaska LNG and broader tariff threats.

The South Korean won traded around 1,355 per dollar, remaining range-bound, supported by Korea’s robust export performance and strong semiconductor demand. September exports surged 83.5% year-on-year to a record $120.9 billion, while semiconductor exports jumped 263% to a record $60.3 billion, driving a record trade surplus of $49.85 billion. Strong export receipts lifted residents’ foreign-currency deposits to a record $140.62 billion in August. Authorities also stepped up measures to stabilize the domestic bond market amid the global sell-off. Meanwhile, higher US Treasury yields remained an offset, with the 10-year yield around 5.3% and the 30-year yield above 5.6%, both near multi-decade highs. Oil prices also climbed above $100 a barrel amid renewed tensions in the Middle East. At the same time, Korea’s CPI held at 2.9% in September, while the BOK warned inflation could stay around 3% in October, raising the prospect of another rate hike.

The South Korean won traded around 1,357 per dollar, holding near recent two-year highs, supported by strong semiconductor demand and Korea’s robust export performance. September exports surged 83.5% year-on-year to a record $120.9 billion, while semiconductor exports jumped 263% to a record $60.3 billion, driving a record trade surplus of $49.85 billion. Additionally, local exporters’ dollar receipts contributed to a record $140.62 billion in foreign-currency deposits held by South Korean residents in August. The won is up roughly 12% in Q3, its strongest quarterly gain since 2022. Meanwhile, higher US Treasury yields remained an offset, with the 10-year yield around 5.3% and the 30-year yield above 5.6%, both near levels last seen in 2002. Oil prices also stayed elevated as US-Iran talks made little progress. At the same time, foreign investors’ net selling of Korean equities reached around KRW 21.5 trillion in September, adding to demand for dollars.