FX.co ★ South Korean Won Extends Losses

The South Korean won continued its recent decline, reaching approximately 1,422 per dollar on Friday. This movement is largely influenced by anticipated further easing measures from the Bank of Korea. Although the central bank maintained its rates unchanged on Thursday, aligning with forecasts, it did hint at the possibility of a rate cut in the forthcoming month to mitigate economic challenges arising from U.S. tariff policies. In light of these developments, South Korea's GDP growth forecast has been downgraded to below the previously estimated 1.5%, while inflation rates are expected to hover around 2%. Concurrently, investors are closely watching the progress in trade negotiations between the U.S. and South Korea. While there have been reports of encouraging developments, persistent trade tensions between the U.S. and China could exert additional pressure on the won, considering South Korea's export-driven economy and vulnerabilities to shifts in global trade conditions. Despite these challenges, the currency is poised for modest gains over the week.