South Korean Won Remains Under Pressure

The South Korean won traded near 1,480 per dollar, remaining under pressure as elevated oil prices and a firm US dollar weighed on the currency despite improved risk sentiment. The won failed to track the risk-on move after global sentiment improved following the US extension of its ceasefire with Iran, highlighting the dominance of external price pressures in the foreign exchange market. Crude prices stayed high amid lingering uncertainty surrounding the Middle East conflict, increasing Korea’s import bill and reinforcing structural demand for the greenback. Even so, South Korea’s economy delivered a stronger-than-expected 1.7% expansion in the first quarter of 2026, marking the fastest pace in more than five years. Growth was driven by robust semiconductor exports and a rebound in facility investment and construction activity, though this provided only limited offset to currency weakness.

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.