FX.co ★ South Korean Won Falls on Sustained Capital Outflows

The South Korean won declined to approximately 1,445 per dollar on Thursday, reaching its lowest point in nearly seven months after modest gains in the previous session. This decline is largely attributed to ongoing capital outflows. The Bank of Korea has cautioned that although increasing overseas investments by individuals and pension funds enhance external stability, they are simultaneously curbing domestic investment activities and exerting continuous downward pressure on the currency. Adding to the negative sentiment are indications of a weakening labor market, evidenced by the record number of "resting" or discouraged workers, which highlights limited job creation and subdued household confidence. However, the decline was somewhat mitigated by data revealing South Korea’s current account surplus achieved a record high in September, buoyed by strong exports and increased dividend income.