The won closed at 1,458.5 per dollar on July 25 after strong July gains, with SK Hynix-related inflows, exporter dollar sales and Bank of Korea rate-hike expectations supporting the currency while oil prices and the Fed outlook guide markets.
South Korea’s won has strengthened sharply in July, closing at 1,458.5 per dollar on July 25, its first finish in the 1,450s since May 7, as inflows tied to SK Hynix’s American depositary receipt issuance, exporter dollar sales linked to strong semiconductor exports and a reversal in foreign equity flows supported the currency. From the end of June through July 24, the won gained 5.84% against the dollar, the strongest appreciation among major currencies in that period, while the won-yen rate fell to 895.44 won per 100 yen, its lowest level in about one year and eight months, reflecting a marked divergence from the yen. Analysts said the won could trade in the mid- to upper-1,400 range in the near term, though some expect the pace of gains to slow once most SK Hynix-related flows are absorbed. Rising Brent crude, which recently moved back above $100 a barrel, has added to inflation pressure and reinforced expectations for another Bank of Korea rate increase, while the US Federal Open Market Committee meeting on July 28-29 is seen as a potential source of dollar and bond-market volatility even though rates are widely expected to stay unchanged.