South Korean Won Forecast: Currency Extends Gains as Dollar Selling Intensifies

The South Korean won has strengthened to around 1,324 per US dollar, reaching its strongest level since October 2024. Month-end dollar selling by exporters and offshore investors has increased the supply of US dollars, while stronger-than-expected economic growth and supportive comments from the Bank of Korea have reinforced the won’s recovery.

However, elevated oil prices and uncertainty surrounding the Federal Reserve’s interest-rate outlook remain potential risks to further gains.

Market Snapshot

Current Currency Price Action

The won has extended its advance as month-end dollar selling by exporters and offshore investors increases greenback supply. Bank of Korea Governor Shin Hyun-song has also highlighted strong export-driven dollar inflows and the won’s undervaluation, supporting expectations for further appreciation.

South Korea’s economy provides additional fundamental support. Third-quarter GDP grew 1.0% quarter-on-quarter, accelerating from 0.6% in the previous quarter and exceeding the 0.8% market expectation.

Bullish Sentiment

1. Strong export-related inflows: Exporters converting dollar receipts into won can support the domestic currency.
2. Better economic growth: GDP growth above expectations strengthens the economic backdrop.
3. Supportive central bank commentary: Remarks on undervaluation and dollar inflows have reinforced positive sentiment.
4. Continued dollar selling: Month-end flows could provide further near-term support.

Bearish Sentiment

1. Elevated oil prices: South Korea’s energy import requirements could increase demand for US dollars.
2. Middle East tensions: Geopolitical uncertainty may sustain energy-price volatility.
3. Federal Reserve uncertainty: The US interest-rate outlook could influence dollar demand and the direction of USD/KRW.
4. Reversal of month-end flows: Temporary dollar-selling pressure may ease once month-end transactions pass.

South Korean Won Forecast: What Traders Are Watching

The near-term outlook for the won remains supported by strong export-driven dollar inflows, improved GDP growth and ongoing dollar selling. However, the sustainability of the rally will depend on whether these factors continue beyond month-end.

Investors are focused on the Federal Reserve’s October 27–28 policy decision for fresh guidance on US interest rates. A more supportive dollar outlook could limit further won appreciation, while continued dollar weakness and robust Korean economic data could extend the currency’s gains.

Market Outlook for the Coming Sessions

The won’s momentum remains positive, but elevated oil prices and global monetary-policy uncertainty could introduce volatility. Traders will monitor dollar flows, energy prices and signals from the Federal Reserve to determine whether the won can maintain its strongest levels since October 2024.

Currency Hedger View

Businesses making or receiving payments in South Korean won should monitor the exchange rate closely. A stronger won can increase the local-currency cost of dollar-denominated purchases, while benefiting businesses converting dollar receipts into won.

Companies with Korean won exposure can explore currency risk-management strategies through Currency Hedger or open an account.

Disclaimer: This analysis is for informational purposes only and does not constitute investment or trading advice. Currency markets are volatile, forecasts may not materialise, and hedging involves costs and risks

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