FX.co ★ South Korean Won Retreats on US Tariff Threats

The South Korean won has depreciated to approximately 1,450 per dollar, undoing previous session gains due to renewed threats of US tariffs and ongoing local demand for the dollar. This decline followed an unexpected move by US President Donald Trump, who announced an increase in auto and reciprocal tariffs on South Korean imports from 15% to 25%. This announcement has reignited concerns about Korea's export prospects and uncertainties in bilateral trade relations. The market reaction was negative, leading to declines in auto and battery stock prices and triggering foreign exchange hedging as investors reconsider growth risks and international investment strategies. Concurrently, persistent local demand for foreign currency has exacerbated the won's decline, with foreign currency deposits reaching a record high amidst heightened exchange-rate volatility. The accumulation of dollar reserves by both corporate entities and households has mitigated downward pressure on the US dollar, sustaining the weakness of the won despite verbal interventions from authorities.