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 greenback extended its retreat ahead of the US September inflation report, which could influence the Federal Reserve’s policy outlook. Markets are assigning an 88% probability to a rate hike in December, although stronger-than-expected inflation could further bolster the dollar by reinforcing the case for tighter monetary policy. Additionally, strong semiconductor exports continued to underpin foreign currency inflows, with local chipmakers converting 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 1,337 per dollar, approaching a recent two-year high, supported by a weaker dollar and continued exporter dollar sales. The greenback extended its retreat ahead of the US September inflation report, which could influence the Federal Reserve’s policy outlook. Markets are assigning an 88% probability to a rate hike in December, although stronger-than-expected inflation could further bolster the dollar by reinforcing the case for tighter monetary policy. Additionally, strong semiconductor exports continued to underpin foreign currency inflows, with local chipmakers converting 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. 14 trillion in South Korean shares.