South Korean Won Hits 4-week Low

The South Korean won strengthened to around 1,360 per dollar, rebounding from four-week lows as oil prices fell sharply. WTI crude declined 4.5% below $100 a barrel, while Brent fell more than 3% amid hopes for progress in US-Iran diplomacy and a recovery in Saudi oil shipments. The US 10-year Treasury yield also fell back below 5% after reaching recent highs last week, easing demand for the dollar. Additionally, South Korea’s strong export performance continued to underpin the won, with exports surging 78% year-on-year in the first 20 days of September, driven by a 259% jump in semiconductor shipments and boosting dollar inflows. Meanwhile, the dollar remained relatively firm as markets monitored the possibility of another Federal Reserve rate increase later this year. Separately, the Bank of Korea said it would assess inflation, growth and financial stability when determining the timing and pace of further rate hikes.

The South Korean Won touched 1389.00 against the USD, the lowest since August 2026. Over the past 4 weeks, US Dollar South Korean Won lost 0.01%, and in the last 12 months, it decreased 0.63%.

The South Korean won weakened to around 1,385 per dollar, hitting a four-week low after the Fed’s rate hike and hawkish guidance last week. The Fed raised its policy rate by 25bp to 3.75%-4.00%, its first increase since 2023, and indicated another hike could come later this year, leaving the US-Korea rate gap as wide as 1 percentage point. The expanded US-Korea rate differential kept attention on the relative yield advantage of dollar assets. Additionally, the Fed’s latest hike could make further BOK easing more difficult, as a larger rate gap could add to depreciation risks for the won. Meanwhile, South Korea’s exports surged 78% year-on-year in the first 20 days of September, led by a 259% jump in semiconductor shipments to $34.1 billion, providing an offset for the won. At the same time, Brent crude remained above $100 a barrel amid ongoing Middle East tensions, keeping Korea’s energy import costs elevated.