The South Korean won is showing resilience despite escalating Strait of Hormuz tensions, with artificial intelligence-driven demand and semiconductor exports providing crucial support, according to MUFG analyst Michael Wan. South Korea’s technology sector strength is helping insulate the currency from broader geopolitical spillover effects hitting other Asian markets. The Bank of Korea has signaled a hawkish stance amid robust export performance and persistent inflation pressures, suggesting the central bank will maintain elevated interest rates in the near term. This monetary policy backdrop combined with strong semiconductor shipments linked to global AI infrastructure buildout is creating a favorable environment for the won despite regional uncertainty. Wan emphasizes that South Korea’s export momentum, particularly in high-demand tech components, continues to outweigh geopolitical risk factors that would typically pressure emerging market currencies.
FXnCO Insight
Traders should monitor South Korean tech export data closely as AI semiconductor demand may continue supporting the won even if Middle East tensions escalate further, creating potential long positioning opportunities against more vulnerable regional currencies.
Source: FXStreet