The South Korean won firmed to around 1,516 per dollar, extending its recovery after briefly hitting its weakest level since March 2009 near 1,560. The rebound was driven by increased dollar supply from authorities and major institutional players aiming to stabilise the currency. The state-run National Pension Service reportedly engaged in FX hedging, prompting additional onshore dollar selling, while policymakers maintained strong verbal warnings against excessive volatility and kept a close watch on market developments.
Sentiment was further supported by improved global risk appetite after Israel and Iran agreed to a ceasefire, reducing demand for safe-haven assets. The won also benefited from sustained strength in semiconductor exports and an upward revision of first-quarter GDP growth to 1.8%, which bolstered expectations for stronger growth and a healthier external balance. However, the currency’s gains were capped by a firm US dollar, as investors scaled back expectations for Federal Reserve rate cuts in light of resilient US economic data.
