South Korean Won Steady on Export Growth

The South Korean won traded around 1,356 per dollar, remaining range-bound, supported by Korea’s robust export performance and strong semiconductor demand. September exports surged 83.5% year-on-year to a record $120.9 billion, while semiconductor exports jumped 263% to a record $60.3 billion, driving a record trade surplus of $49.85 billion. Strong export receipts lifted residents’ foreign-currency deposits to a record $140.62 billion in August. Authorities also stepped up measures to stabilize the domestic bond market amid the global sell-off. Meanwhile, higher US Treasury yields remained an offset, with the 10-year yield around 5.3% and the 30-year yield above 5.6%, both near multi-decade highs. Oil prices also climbed above $100 a barrel amid renewed tensions in the Middle East. At the same time, Korea’s CPI held at 2.9% in September, while the BOK warned inflation could stay around 3% in October, raising the prospect of another rate hike.

The South Korean won traded around 1,357 per dollar, holding near recent two-year highs, supported by strong semiconductor demand and Korea’s robust export performance. September exports surged 83.5% year-on-year to a record $120.9 billion, while semiconductor exports jumped 263% to a record $60.3 billion, driving a record trade surplus of $49.85 billion. Additionally, local exporters’ dollar receipts contributed to a record $140.62 billion in foreign-currency deposits held by South Korean residents in August. The won is up roughly 12% in Q3, its strongest quarterly gain since 2022. Meanwhile, higher US Treasury yields remained an offset, with the 10-year yield around 5.3% and the 30-year yield above 5.6%, both near levels last seen in 2002. Oil prices also stayed elevated as US-Iran talks made little progress. At the same time, foreign investors’ net selling of Korean equities reached around KRW 21.5 trillion in September, adding to demand for dollars.

The South Korean won traded around 1,360 per dollar, holding onto recent gains, as strong earnings prospects for Korean chipmakers continued to underpin the currency. Major Korean chipmakers are expected to report robust third-quarter results amid strong global demand for chips, keeping the outlook for export revenues and foreign-currency inflows favorable. At the same time, the finance ministry and Bank of Korea agreed to step up cooperation on financial market monitoring and response, while seeking a harmonious policy mix between economic and monetary policies. Meanwhile, higher US Treasury yields during the Chuseok holiday raised concerns over wider interest-rate differentials and further Fed hikes. Additionally, Brent crude rose above $105 a barrel amid uncertainty over the Strait of Hormuz, increasing Korea’s import costs and inflation concerns.