FX.co ★ South Korean Won Rises as Dollar Weakens

On Monday, the South Korean won appreciated, climbing above 1,375 per dollar, as it regained ground lost in the previous session. This recovery was propelled by a weakening US dollar, amidst rekindled trade tensions. The dollar's decline followed President Donald Trump's announcement last Friday of an increase in tariffs on steel imports to 50%, effective from June 4. Concurrently, China accused the United States of violating the trade agreement reached in May and vowed to implement "strong and resolute measures" in response. Domestically, South Korea's manufacturing sector continued its fourth month of contraction, which further indicates signs of an economic slowdown. The Bank of Korea has recently adjusted its 2025 GDP growth forecast to a modest 0.8%, down from 1.5%, due to delayed recovery in domestic demand and declining export shipments influenced by US tariffs. These weak economic indicators and downward projections bolster expectations for the central bank to consider additional easing measures. Investors are now focusing on key inflation data scheduled for release on Wednesday, which will provide further insights into the trajectory of monetary policy.