FX.co ★ South Korean Won Dips as Q1 GDP Contracts

The South Korean won fell below 1,430 per dollar, erasing gains from the prior session following preliminary Q1 GDP figures that revealed an unexpected downturn. The South Korean economy contracted by 0.2% quarter-on-quarter in Q1 2025, contrary to predictions of a 0.1% increase, while the annual GDP slipped 0.1%, missing projections of a 0.2% growth. This occurs in a context of intensified domestic political uncertainty and the impact of extensive US tariffs. Concurrently, South Korea and the US were scheduled to convene their inaugural “2+2” trade discussions later in the day in Washington, involving the finance and trade ministers, which is seen as a possible move towards mitigating the recently introduced US tariffs. Furthermore, US President Trump took a more conciliatory approach towards tariffs on China, indicating the US government's intention to seek "a fair deal with China" and suggesting that Beijing could potentially receive a revised tariff rate in the coming weeks, providing some relief for the export-dependent won.