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South Korean Won Extends Gains to 11-Month High

The South Korean won traded toward 1,382 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.

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