The South Korean won firmed to around 1,360 per dollar, rebounding from four-week lows as oil prices fell sharply. WTI crude dropped 4.5% to below $100 a barrel, while Brent declined more than 3%, amid hopes for progress in US-Iran negotiations and signs of recovery in Saudi oil shipments. The US 10-year Treasury yield also slipped back below 5% after hitting recent highs last week, easing support for the dollar.
At the same time, South Korea’s robust export performance continued to support the won. Exports surged 78% year-on-year in the first 20 days of September, driven by a 259% increase in semiconductor shipments, which helped boost dollar inflows. Still, the dollar remained relatively firm as investors monitored the prospect of another Federal Reserve rate hike later this year.
Separately, the Bank of Korea reiterated that it will weigh inflation, growth, and financial stability in determining the timing and pace of any further interest rate increases.
