FX.co ★ Won Rises on Fed Rate-Cut Expectations, Domestic Growth Signals

On Tuesday, the South Korean won strengthened, reaching approximately 1,471 per dollar. This recovery from recent multi-month lows was driven by increasing expectations of an impending interest rate cut by the Federal Reserve. Investors are keenly awaiting the latest U.S. economic data for clues on future policy moves. Meanwhile, domestic factors also contributed to a more optimistic outlook, with the Bank of Korea gearing up for its rate-setting meeting on Thursday. During this meeting, officials are expected to consider financial stability risks linked to rising apartment prices and the robust third-quarter economic growth, highlighted by a 1.2% increase in GDP, which may impose limitations on further monetary easing. Further enhancing the positive sentiment, the International Monetary Fund (IMF) has kept its 2025 growth forecast for South Korea steady at 0.9%, acknowledging the economy's recovery phase in the second half of the year. The IMF anticipates more substantial growth in 2026, fueled by a resurgence in consumption, supportive policies, and improved consumer sentiment post-election.