The South Korean won weakened to around 1,380 per dollar, its lowest level in three weeks, after the Fed raised its policy rate by 25 basis points to 3.75%-4.00%. The increase, the Fed’s first since 2023, was accompanied by hawkish guidance indicating another hike could come later this year. That prospect left the US-Korea rate differential as wide as 1 percentage point, keeping focus on the relative yield advantage of dollar assets. The dollar index remained near a seven-week high after the FOMC decision. Foreign investors also extended their selling of Korean assets to six consecutive sessions, increasing demand for dollars. Oil prices eased from recent highs after Saudi Arabia offered additional crude cargoes and the damaged East-West pipeline was expected to resume operations within days, potentially reducing pressure on South Korea’s energy import bill, although Brent remained above $100 a barrel.