The South Korean won strengthened sharply on the 7th, trading around 1,345 per dollar and reaching an intraday low of 1,334.7, its strongest level since October 2024. The currency gained despite stronger-than-expected August U.S. payrolls, which lifted markets’ implied probability of a September Federal Reserve rate hike from roughly 50% to about 60%. Support came from yen strength, unwinding of yen short positions, exporter dollar sales and foreign investment inflows into South Korean equities. Record cumulative exports of $709.4 billion, a 169.6% year-on-year increase in semiconductor exports during January-August, and record corporate dollar deposits of roughly $77 billion underscored strong foreign-currency earnings, although exporters’ delayed conversions also contributed to the buildup of dollar deposits. The won has recovered roughly 250 won from its July low; separately, the exchange rate has fallen more than 220 won from the July 1 intraday peak of 1,559.2. Settlement demand, oil prices, U.S. inflation data and importer dollar demand will determine whether the appreciation continues.