South Korean Won Extends Losses to Over One-Month Low

The South Korean won weakened toward 1,504 per dollar, extending losses to a more than one-month low, as a stronger dollar and persistent global yield pressures weighed on sentiment. The greenback gained support from rising US Treasury yields, with markets reassessing expectations that the Federal Reserve will keep policy restrictive for longer amid still-elevated inflation pressures. Geopolitical tensions in the Middle East also added to dollar demand, with higher oil prices reinforcing inflation concerns and supporting safe-haven flows into USD assets. This kept pressure on regional currencies, including the won, which remains sensitive to global liquidity conditions and external risk sentiment. Domestically, expectations of sustained high Korean interest rates, continued foreign portfolio outflows, and recent financial market volatility have also weighed on the currency, reinforcing cautious positioning toward the won.

The South Korean won weakened past 1,500 per dollar, extending losses to its lowest level in over a month, amid renewed risk-off sentiment and a stronger dollar. US President Donald Trump signaled reduced patience in the ongoing standoff with Iran, heightening concerns over potential escalation and keeping Strait of Hormuz supply risks in focus. This triggered broader risk-off in regional equities, with equity weakness and foreign fund outflows adding pressure on the currency. Oil prices were also supported, raising South Korea’s energy import costs given its reliance on imported crude and commodities. At the same time, broader dollar strength, supported by firmer US yields and sustained policy uncertainty, continued to limit recovery in the won. Market attention also remained on discussions between Seoul and Washington regarding a potential currency swap arrangement, seen as a longer-term stabilizing factor for FX volatility, though no concrete progress has been confirmed.

The South Korean Won touched 1493.00 against the USD, the lowest since April 2026. Over the past 4 weeks, US Dollar South Korean Won gained 0.9%, and in the last 12 months, it increased 5.33%.