FX.co ★ Won Falls as Capital Outflows Mount

The South Korean won weakened to approximately 1,472 on Monday, nearing its lowest point in over seven months, as market sentiment continued to be weighed down by fears of ongoing capital outflows. The currency's slump is further evidenced by its real effective exchange rate plummeting to 89.09 in October, the lowest in about 16 years. Experts caution that South Korea's increasing preference for foreign assets, notably U.S. equities, is rendering the won more susceptible amidst a globally strong dollar and heightened risk aversion. Several institutions anticipate further weakening, with one leading brokerage predicting that the won could decline to the mid-1,500s by 2026 due to a persistently rising outflow of capital and subdued domestic demand. The exposure to overseas markets has increased significantly, as the trading volume of foreign shares by Korean investors soared to $530.84 billion last year, with this year's figure reaching $466.19 billion by September.