The South Korean won has surged against the US dollar with USD/KRW declining steadily to around 1340 since late June, according to DBS Group Research analyst Chang Wei Liang. The sharp repricing reflects earlier market optimism driven by Korea’s booming memory chip sector and robust corporate investment plans. However, DBS now expects these gains to moderate going forward as the factors supporting the won’s strength may be losing momentum.
The move represents a significant appreciation for the Korean currency, with traders and corporates exposed to won positions experiencing notable valuation shifts over recent weeks. The rally has been fueled by Korea’s dominant semiconductor manufacturers benefiting from surging AI-related memory chip demand and commitments to substantial capital expenditure programs. DBS’s analysis suggests the rapid appreciation phase may be nearing exhaustion as initial optimism gets priced in.
FXnCO Insight
Traders long on KRW should consider taking profits or tightening stops as DBS flags moderation risk, while those with USD/KRW exposure may find tactical entry points emerging if the won’s rally stalls.
Source: FXStreet