South Korean currency authorities have signaled a pause in the won’s recent rally after the USD/KRW pair bounced back from 1335 levels. The reversal came following reports that Korea’s National Pension Service is considering halting or even reversing its dollar selling activity in the forward market, according to ING strategist Chris Turner.
The won has experienced a substantial 15 percent strengthening against the dollar since June, and Korean officials now appear satisfied with the currency’s appreciation trajectory. This potential shift in the National Pension Service’s forex strategy suggests authorities want to prevent further rapid won gains that could hurt export competitiveness.
The development marks a notable change in South Korea’s currency management approach after months of won strength. Traders should monitor whether this pause becomes a broader trend reversal, particularly as the NPS manages one of Asia’s largest pension funds with significant foreign exchange exposure.
FXnCO Insight
Expect USD/KRW to find near-term support around current levels as the policy signal reduces downside pressure on the dollar-won pair.
Source: FXStreet