FX.co ★ South Korean Won Strengthens on FX Measures, Trade Gains

The South Korean won strengthened to approximately 1,466 per dollar on Thursday, gaining momentum after stabilizing over the previous two sessions. This appreciation was fueled by continued government efforts to mitigate concerns over potential capital outflows, lending support to the currency. Following the Ministry of Trade, Industry, and Resources unveiling a modular trade agreement framework, attention shifted back to the foreign exchange market. The National Pension Service is anticipated to become more active if the won nears the 1,480 to 1,500 range. Optimism increased as confidence grew in the implementation of additional foreign exchange management measures. Bolstering this trend, exports witnessed a significant jump of 17.3% year-on-year in the first ten days of December, driven by strong global demand for semiconductors, with shipments totaling $20.58 billion, an increase from $17.54 billion in the same period last year. Additionally, sentiment was lifted as the US Federal Reserve reduced its key interest rate to 3.5–3.75 percent, which narrowed the interest rate differential between the US and South Korea to as much as 1.25 percentage points.