South Korean Won Slips on Geopolitical Risks

The South Korean won weakened to around 1,473 per dollar, pulling back after recently touching a more than two-month high near 1,445, amid escalating Middle East tensions and surging oil prices. Negotiations between the US and Iran remained stalled after both sides rejected key elements of each other’s proposals. Iran vowed to “never bow,” while both sides continued exchanging strikes and threats, prolonging instability around the Strait of Hormuz. Brent crude remained elevated above $100 per barrel, reinforcing concerns over higher energy import costs for Korea and supporting broader dollar strength. Safe-haven demand for the US dollar increased as investors reacted to rising geopolitical uncertainty, further pressuring Asian currencies. Meanwhile, markets also noted that Korea’s reduced dependence on Middle Eastern energy has helped partially cushion longer-term vulnerability to oil shocks, though near-term price spikes continue to weigh on sentiment.

The South Korean won weakened to around 1,470 per dollar, pulling back after touching a more than two-month high, as renewed US-Iran tensions triggered risk-off sentiment across Asian markets. The confrontation saw both sides exchange fire in the Strait of Hormuz, raising concerns over potential disruptions to global oil supplies, while pushing Brent crude above $100 per barrel and strengthening the US dollar as investors sought safe-haven assets. The move prompted broad USD demand and profit-taking across regional currencies, with the won among the weaker performers. Meanwhile, downside pressure was partly cushioned by strong external fundamentals, after South Korea posted a record current account surplus in March driven by a surge in semiconductor exports. Expectations of sustained AI-led chip demand and a resilient trade balance continued to provide structural support, even as short-term flows remained dominated by geopolitical risk and dollar strength.

The South Korean won fell half a percent to around 1,454 per dollar on Thursday, trimming some gains but remaining near its strongest level in over two months, as investors booked profits after the recent rally. The currency had strengthened recently on improved global risk sentiment and robust domestic equity performance. Despite the modest pullback, broader support remained intact as signs of progress in US–Iran peace negotiations helped limit demand for the dollar and supported Asian currencies overall. Korea’s strong external position also continued to provide structural support, with record first-quarter exports led by semiconductors, where shipments surged 139% year-on-year on strong AI-driven demand. At the same time, strength in the KOSPI, which remains near record highs, helped sustain expectations of equity-related inflows, keeping the won broadly supported.