South Korean Won Edges Up

The South Korean won firmed to around 1,480 per dollar, recovering slightly from the previous session, as traders cashed out recent dollar gains, leading to some buying of the won. This came as investors who had been positioned for further dollar strength scaled back bets after the recent pullback. Supporting the move, Bank of Korea data showed resident foreign currency deposits posted a record monthly decline in March, reflecting earlier conversions into US dollars during the won’s prior weakening phase, followed by some normalization in FX flows as conditions stabilized. Gains were limited as the US dollar remained broadly firm after stalled US–Iran peace talks, with renewed geopolitical uncertainty sustaining safe-haven demand. Elevated oil prices also continued to weigh on the won through persistent import-related dollar demand. Overall, the move reflected short-term positioning adjustments rather than a change in the broader dollar strength trend.

The South Korean won weakened to around 1,486 per dollar, retreating from its strongest level in over a month, amid higher oil prices and a firm dollar. The currency remained under pressure amid lingering geopolitical uncertainty in the Middle East, with risk sentiment still influenced by US–Iran ceasefire developments and earlier disruptions in the Strait of Hormuz, which had driven crude prices higher and raised concerns over Korea’s import bill. At the same time, the US dollar held firm as investors maintained a cautious stance, keeping pressure on emerging Asian currencies, including the won, despite relative resilience in local equities. Separately, Bank of Korea officials reiterated that excessive volatility in the won is not desirable, while maintaining a cautious policy stance amid heightened uncertainty from oil prices and geopolitical risks. Expectations of continued foreign inflows, supported by Korea’s improving market accessibility, helped limit losses.

The South Korean won eased to around 1,475 per dollar, retreating from its strongest level since March, as foreign equity outflows and cautious global risk sentiment weighed on the currency. South Korea recorded renewed foreign selling of KRW 376.6 billion in local equities, which offset recent stabilisation after a sharp $23.8 billion outflow in March, reinforcing near-term dollar demand and limiting further gains. At the same time, geopolitical uncertainty in the Middle East lingered, with US–Iran negotiations still ongoing and no firm agreement in place, while elevated oil prices continued to pressure South Korea’s economy given its heavy reliance on energy imports. Moreover, domestic sentiment softened further, with consumer confidence falling to its lowest since May 2025, while both manufacturing and financial conditions remained subdued, highlighting cautious investor sentiment and leaving limited support for capital inflows.