The South Korean won traded around 1,355 per dollar, extending its rally to the strongest level since early July 2025. The move came as fading expectations of another US rate hike weakened the dollar and pushed Treasury yields lower. Fed Governor Christopher Waller signaled support for keeping rates unchanged if inflation continues to ease, prompting markets to trim the implied probability of a September hike to about 50%, down from roughly 63% earlier. The 10-year US Treasury yield also retreated after recently touching its highest level since November 2023.
On the domestic front, South Korea reported a solid external position: the current account registered a $42.08 billion surplus in July, the second-largest monthly surplus on record and the biggest ever for that month, underpinned by resilient semiconductor-driven goods exports. Even so, the outlook for the won faces headwinds, as renewed US plans for targeted semiconductor tariffs tied to companies’ domestic production could pressure Korea’s trade dynamics, given the central role of chip exports in its external balance.
