The South Korean won’s recent rally against the US dollar appears to be losing momentum after eight consecutive sessions of gains, according to OCBC Bank strategists Sim Moh Siong and Christopher Wong. The USD/KRW pair has entered a consolidation phase as multiple crosscurrents impact the exchange rate.
While exporter demand for won and month-end dollar selling continue to support the Korean currency, these bullish factors are now being counterbalanced by a strengthening dollar tone globally and foreign investors pulling capital out of South Korean equities. This combination has effectively stalled the won’s appreciation trajectory.
The development affects traders holding won positions, Korean exporters managing currency exposure, and investors with South Korean equity allocations. The shift suggests the won’s recent strength may have reached near-term limits as capital flow dynamics turn less favorable.
FXnCO Insight
Traders should watch for potential range-bound trading in USD/KRW rather than continuation of the won’s recent appreciation, particularly if foreign equity outflows persist alongside broader dollar strength.
Source: FXStreet