South Korean Won Weakens on Higher US Yields
The South Korean won weakened to around 1,370 per dollar, reversing gains after a sharp rebound, as a surge in US Treasury yields lifted the dollar. The US 10-year Treasury yield climbed to its highest level since July 2007, while stronger-than-expected US economic data heightened inflation concerns and reinforced expectations for further policy tightening. The probability of another 25-basis-point Fed rate hike in October rose to around 70% from 55%, taking the dollar near its strongest level in almost two months. Additionally, oil prices rebounded amid renewed Middle East risks, with Brent crude rising above $103 a barrel, raising concerns over potential supply disruptions and higher import costs for Korea. Meanwhile, the US and China reportedly agreed to extend their trade truce by two months, giving the two sides more time to negotiate a broader agreement and reducing near-term trade uncertainty for Korea’s major trading partners.
The South Korean won weakened to around 1,370 per dollar, reversing gains after a sharp rebound, as a surge in US Treasury yields lifted the dollar. The US 10-year Treasury yield climbed to its highest level since July 2007, while stronger-than-expected US economic data heightened inflation concerns and reinforced expectations for further policy tightening. The probability of another 25-basis-point Fed rate hike in October rose to around 70% from 55%, taking the dollar near its strongest level in almost two months.
Additionally, oil prices rebounded amid renewed Middle East risks, with Brent crude rising above $103 a barrel, raising concerns over potential supply disruptions and higher import costs for Korea. Meanwhile, the US and China reportedly agreed to extend their trade truce by two months, giving the two sides more time to negotiate a broader agreement and reducing near-term trade uncertainty for Korea’s major trading partners.