The South Korean won appreciated to around 1,510 per dollar, rebounding after briefly touching its weakest level since March 2009 near 1,520, as easing geopolitical tensions revived demand for risk-sensitive Asian assets. Market sentiment improved on signs of progress in US-Iran negotiations, which raised expectations that the Strait of Hormuz could reopen. That prospect helped drive crude oil prices down by more than 4%, alleviating concerns about global energy supply disruptions and inflationary pressures.
The won also drew support from sustained optimism over South Korea’s semiconductor industry, underpinned by strong AI-related demand, record trading volumes on the KOSPI, and solid chip export performance, all of which bolstered confidence in the country’s export outlook. In addition, investor sentiment was lifted by plans to allow foreign investors to trade South Korean ETFs directly, a reform expected to encourage further overseas capital inflows into local financial markets.
