FX.co ★ South Korean Won Hits Three-Week Low

The South Korean won weakened to around 1,545 per dollar, extending its slide to the lowest level in three weeks as a stronger US dollar and continued foreign equity outflows pressured the currency. The greenback remained firm after US core inflation rose to its highest level since October 2023, bolstering expectations that the Federal Reserve will keep interest rates higher for longer. At the same time, official data showed that offshore investors logged a record net selloff of Korean stocks in May, highlighting how sustained foreign equity outflows continue to pose a major headwind for the won, despite the country’s still favorable, AI-driven earnings outlook. Capping further losses in the currency, oil prices stayed subdued as easing concerns over supply disruptions in the Middle East improved the outlook for the energy-importing Korean economy. Authorities also expanded discounts on agricultural and fishery products in an effort to keep inflation near 3% in the second half of the year, following May’s 26-month high of 3.1%.