FX.co ★ South Korean Won Rises Near 2-Year High

The South Korean won traded around 1,337 per dollar, nearing a two-year high, supported by a weaker greenback and steady dollar selling by exporters. The US currency extended its decline ahead of the September inflation report, a key release that could shape the Federal Reserve’s policy outlook. Futures markets currently assign about an 88% probability to a rate hike in December, though an upside surprise in inflation could further strengthen the dollar by reinforcing expectations for tighter monetary policy.

Robust semiconductor exports also continued to support foreign currency inflows, as major local chipmakers converted overseas earnings into won. However, elevated oil prices remain a risk: higher energy import costs could widen South Korea’s trade deficit and lift demand for dollars. Persistent foreign portfolio outflows are another headwind, with overseas investors registering six consecutive sessions of net selling and unloading a cumulative KRW 13.14 trillion in South Korean equities.