FX.co ★ South Korean Won Weakens Further

The South Korean won weakened to around 1,353 per dollar, pulling back from a near two-year high as expectations grew for tighter Federal Reserve policy. Markets were assigning roughly a 92% probability to a 25-basis-point rate hike this week, while the 10-year US Treasury yield hovered near 5%, underpinning the US dollar.

Rising crude oil prices further stoked inflation concerns. Oil climbed above $100 a barrel amid escalating tensions in the Middle East, heightening worries over South Korea’s energy import costs. A vessel was recently hit in the Strait of Hormuz, and Saudi Arabia has kept its East–West crude pipeline closed following drone attacks, raising the risk of additional disruptions to regional oil supply.

Foreign investors also offloaded a net 3.2 trillion won in local equities, adding downward pressure on the currency. Even so, steady dollar selling by major semiconductor exporters helped cap the won’s losses.