South Korean won extends gains to 11-month high

The South Korean won traded toward 1,380 per dollar, extending gains to its strongest level since mid-September 2025, as a weaker US dollar and strong domestic fundamentals supported the currency.

The dollar index remained near multi-month lows as concerns over US fiscal deficits and the Treasury's bond-buyback efforts weighed on the greenback.

At the same time, Bank of Korea Senior Deputy Governor Kwon Min-soo said economic fundamentals suggest the won could strengthen further, noting stronger-than-expected growth and inflation above target.

Exports jumped 56% year-on-year in the first 20 days of August, while semiconductor shipments nearly tripled to $26 billion, generating a $14 billion trade surplus and supporting exporter dollar-selling.

The strong data could bolster expectations for another BOK rate hike on August 27, after the central bank raised its policy rate to 2.75% last month.

However, renewed gains in US Treasury yields and geopolitical risks remained potential headwinds.