FX.co ★ Won Rises on Trade Progress, Equity Inflows

The South Korean won strengthened to approximately 1,448 against the US dollar, recovering from recent declines. This improvement is attributed to indications of decreased trade-policy risks and increased capital inflows. Market sentiment got a boost after Prime Minister Kim Min-seok announced that Seoul and Washington are resolving differences through direct discussions with US Vice President JD Vance. Although President Donald Trump had recently threatened a potential tariff increase, subsequent comments suggesting a possible negotiated resolution have alleviated fears. Korean equities also contributed to the currency's strength as they recovered sharply following previous substantial declines, coinciding with stabilization in global markets. Domestic institutions played a key role in this rally, and foreign investors increased their net positions, further enhancing capital inflows and reinforcing demand for the currency. Investors are also focusing on domestic inflation developments; consumer prices in January slowed down, with both headline and core inflation at 2%, aligning with the Bank of Korea's target and showing a decrease from the previous month's rate.