South Korean Won Remains Under Pressure

The South Korean won traded near 1,545 per dollar, remaining close to its weakest level in over three weeks as persistent foreign equity outflows continued to weigh on the currency. Overseas investors sold a record KRW 7.7 trillion worth of KOSPI shares in the previous session, extending their net selling streak to seven consecutive trading days. At the same time, South Korea's industrial production fell 0.3% in May, with semiconductor output declining 10% due to shipment adjustments and base effects. Meanwhile, renewed diplomatic talks between the United States and Iran eased concerns over potential disruptions to oil supplies through the Strait of Hormuz, improving broader market sentiment and helping limit additional pressure on the won. For June, the KRW weakened by more than 2% against the US dollar.

The South Korean won traded around 1,545 per dollar, extending losses near its lowest level in over three weeks as geopolitical tensions in the Middle East lifted oil prices and boosted demand for the US dollar. The United States launched fresh strikes on Iranian military targets after Tehran attacked shipping near the Strait of Hormuz, while uncertainty over renewed negotiations between the two countries continued to fuel investor caution. Markets also remained focused on the Federal Reserve's annual policy forum in Sintra and key US labor market data due later this week, with expectations for higher-for-longer US interest rates supporting the greenback. Meanwhile, investors monitored President Lee Jae Myung's announcement of large-scale investments in semiconductors, AI, and data centers, as the government and major chipmakers prepared to unveil long-term investment plans aimed at strengthening South Korea's advanced technology sector.

The South Korean won weakened to around 1,545 per dollar, extending losses to its lowest level in three weeks as a firmer US dollar and persistent foreign equity outflows weighed on the currency. The greenback remained supported after US core inflation reached its highest level since October 2023, reinforcing expectations that the Federal Reserve could keep interest rates higher for longer. At the same time, official data showed offshore investors recorded a record net selloff of Korean stocks in May, underscoring that persistent foreign equity outflows remain a key headwind for the won, even as the country's AI-driven earnings outlook stays favorable. Limiting further losses, oil prices remained subdued as easing concerns over Middle East supply disruptions improved the outlook for the energy-importing economy. Authorities also rolled out broader discounts on agricultural and fishery products to keep inflation around 3% in the second half following May's 26-month high of 3.1%.