FX.co ★ South Korean Won Retreats from 6-Month Highs

The South Korean won weakened to approximately 1,380 per dollar, retreating from a significant 1.4% rally in the previous session, which had elevated it to its highest point since November 4. This fluctuation follows reports indicating that Washington has encouraged Seoul to implement measures aimed at strengthening the currency. This action is part of broader US-Korea trade discussions, where the United States has expressed concerns over trade imbalances. Investors are now closely monitoring the developments in these ongoing discussions in Washington, where Seoul is advocating for a reduction of US tariffs ahead of the July deadline. Domestically, markets remain cautious due to persistent political uncertainty as the June 3 presidential elections approach. Economic pressures are also palpable, with projections suggesting the economy will grow by only 0.8% in 2025, 1.9 percentage points below the global average—a disparity not seen since the 1998 Asian financial crisis. Meanwhile, the won received some support due to a softer US dollar, which is under pressure from fiscal concerns related to Trump's debt-heavy budget proposal.