FX.co ★ South Korean Won Hits 3-Week High

The South Korean won has appreciated to approximately 1,440 per dollar, marking its strongest level in three weeks. This strengthening is attributed to the general weakening of the US dollar and continued foreign investment in South Korean equities. The US dollar's impact was notably felt against major and Asian currencies due to potential intervention in Japan, which boosted regional currencies, including the won. Furthermore, the won benefited from a surge in foreign demand for South Korean stocks, with international ownership approaching a six-year peak, driven by notable increases in technology, shipbuilding, defense, and nuclear power sectors. The KOSPI index's climb above the 5,000 threshold stimulated foreign exchange inflows and reduced the need for hedging. Simultaneously, there was a decrease in domestic dollar accumulation, exemplified by a reduction in corporate dollar deposits, which in turn minimized upward pressure on the dollar-won exchange rate. Looking forward, the focus remains on the overall sentiment towards the dollar and global currency market changes linked to Japan and US policy cues, in addition to the forthcoming guidance from the Federal Reserve.