FX.co ★ South Korean Won Slips for 3rd Session

The South Korean won depreciated beyond 1,375 per dollar on Wednesday, continuing its losing streak for the third session in a row, under pressure from a strengthening US dollar. The dollar's upward trajectory was fueled by heightened US consumer confidence and the resolution of trade frictions between the US and the EU, which bolstered investor sentiment. Additionally, there is widespread anticipation that the Bank of Korea will reduce its benchmark interest rate by 25 basis points to 2.5% during its monetary policy meeting scheduled for tomorrow. Attention is also centered on promises of economic stimulus ahead of South Korea's presidential election set for June 3. Despite these pressures, the won found some backing from optimistic economic indicators, such as business sentiment reaching a 10-month peak in May. This uplift was driven by political stabilization and the prospect of decreased interest rates. Furthermore, retail sales experienced a 7% increase in April, demonstrating robust consumer demand. The government is also set to extend 250 billion won in low-interest loans to support auto-parts manufacturers, aiming to mitigate the impact of US tariffs, which offers additional support to the export-dependent won.