South Korean Won Rises Near 2-Year High

The South Korean won traded around 1,337 per dollar, approaching a recent two-year high, supported by a weaker dollar and continued exporter dollar sales. The dollar weakened further as investors cautiously awaited the US September inflation report for fresh signals on the Federal Reserve’s next policy move. Markets are assigning an 88% probability to a rate hike in December. Strong semiconductor exports also continued to underpin foreign currency inflows, as chip exports exceeded USD 60 billion for the first time in September and local chipmakers converted overseas earnings into won. Meanwhile, elevated oil prices remained a risk, as higher energy import costs could widen Korea’s trade deficit and increase demand for dollars. Persistent foreign portfolio outflows also remained a headwind, with overseas investors recording six consecutive sessions of net selling and offloading a cumulative KRW 13.14 trillion in South Korean shares.

The South Korean won traded around 1,342 per dollar, reversing after touching its strongest level since October 2024, as a stronger US dollar and rising oil prices weighed on the currency. The dollar index held near its highest level since April 2025, amid heightened geopolitical uncertainty and concerns over renewed inflationary pressures. Oil prices extended their gains for a third session as fresh attacks on Saudi Arabia followed a deadly strike on Riyadh's airport. Continued Russian strikes raised further questions over the energy truce with Ukraine. Brent crude climbed above USD 106 per barrel, adding to concerns over South Korea's energy import bill. Investors are also awaiting September US CPI data due this week for further clues on the Federal Reserve's policy outlook. Meanwhile, continued dollar selling by local exporters, particularly semiconductor companies converting overseas earnings into won, helped limit the currency's retreat.

The South Korean won traded around 1,331 per dollar, reaching its strongest level since October 2024, as robust export growth and dollar selling by local companies supported the currency. South Korea’s exports more than doubled year-on-year to a record USD 26.1 billion in the first 10 days of October, led by a 170.9% surge in semiconductor shipments to USD 12.1 billion, reinforcing the favorable external backdrop. Additionally, chip exporters’ conversion of overseas earnings into won further supported the currency. Oil prices also eased on hopes that increased Russian diesel supplies could help relieve global fuel shortages, after President Trump said Moscow had agreed to release diesel to global markets and claimed Russia and Ukraine had reached an immediate energy ceasefire. Meanwhile, elevated US Treasury yields and the prospect of further Fed tightening continued to limit the won’s gains. Renewed Houthi attacks on Saudi Arabia over the weekend also added to geopolitical risks.