South Korean Won Weakens Further
The South Korean won weakened to around 1,353 per dollar, retreating from a near two-year high amid rising expectations for tighter Federal Reserve policy. Markets were pricing in a roughly 92% chance of a 25-basis-point rate hike this week, while the 10-year Treasury yield remained elevated near 5%, keeping the dollar firm. Higher crude prices also added to inflation risks, with oil climbing above $100 a barrel amid escalating Middle East tensions and raising concerns over higher energy import costs for South Korea. A vessel was recently struck in the Strait of Hormuz, while Saudi Arabia kept its East-West crude pipeline shut following drone attacks, threatening further disruptions to regional oil supplies. Foreign investors also sold a net 3.2 trillion won of local stocks, adding to the won’s decline. Meanwhile, persistent semiconductor exporters’ dollar sales helped limit the won’s losses.
The South Korean won weakened to around 1,353 per dollar, retreating from a near two-year high amid rising expectations for tighter Federal Reserve policy. Markets were pricing in a roughly 92% chance of a 25-basis-point rate hike this week, while the 10-year Treasury yield remained elevated near 5%, keeping the dollar firm. Higher crude prices also added to inflation risks, with oil climbing above $100 a barrel amid escalating Middle East tensions and raising concerns over higher energy import costs for South Korea.
A vessel was recently struck in the Strait of Hormuz, while Saudi Arabia kept its East-West crude pipeline shut following drone attacks, threatening further disruptions to regional oil supplies. 2 trillion won of local stocks, adding to the won’s decline. Meanwhile, persistent semiconductor exporters’ dollar sales helped limit the won’s losses.