FX.co ★ Korean Won Pauses Gains on Oil Rally

The South Korean won hovered around 1,480 per dollar, consolidating after its recent advance to the strongest level since mid-May, as escalating US-Iran tensions drove oil prices higher and weighed on risk appetite. Brent crude climbed above $85 per barrel, on track for its biggest weekly gain since April, after renewed US strikes on Iran and attacks near the country’s main oil export terminal intensified fears of supply disruptions. Earlier in the week, the Bank of Korea raised its benchmark interest rate by 25 basis points to 2.75%, as widely anticipated, marking its first hike since early 2023. Policymakers aimed to rein in persistent inflation and bolster the currency after months of depreciation. The move signaled the start of a new tightening cycle, though further gains in the won were limited by cautious market sentiment amid renewed volatility in technology stocks and rising geopolitical tensions.