FX.co ★ South Korean Won Rises to Over 2-Month High

The South Korean won strengthened to around 1,485 per dollar, rising for a fifth consecutive session and reaching its highest level since mid-May after the Bank of Korea raised interest rates. The central bank increased its benchmark rate by 25 basis points to 2.75%, in line with expectations, marking its first hike since early 2023 as policymakers moved to rein in persistent inflation and shore up the currency after months of depreciation. The move signaled the start of a new tightening cycle, with investors now weighing the likelihood of additional rate hikes should inflation remain elevated. However, further gains in the won were capped as fresh US strikes on Iran drove demand for the safe-haven US dollar and fueled worries about potential disruptions to global energy supplies. Overall market sentiment also stayed fragile, with renewed volatility in technology stocks dampening risk appetite.