The South Korean won climbed to around 1,413 per dollar, nearing its highest level in more than ten months, as softer US inflation data tempered expectations of further Federal Reserve tightening and lifted risk sentiment. US producer prices were flat month-on-month in July, easing worries about a resurgence in inflationary pressures. As a result, markets now assign roughly a 35% probability to a September rate hike, down from about 55% a week earlier, reducing upward pressure on the dollar.
In addition, sustained dollar-selling and renewed foreign demand for Korean assets have supported the won. The conversion of SK hynix’s ADR proceeds into won has remained a key driver of the currency’s sharp appreciation in recent weeks. Foreign investors’ renewed interest in Korean equities has further bolstered demand for the won, while Korea’s strengthening economic recovery—backed by robust exports and improving domestic consumption—provides an additional tailwind for the currency.
