USD/KRW falls to 1,430 as reports of coordinated FX intervention and exporter dollar sales support the won.
The South Korean won extended gains against the US dollar, with USD/KRW slipping 0.1% to 1,430. The move follows reports of coordinated foreign exchange intervention by South Korea’s Ministry of Economy and Finance alongside Japan, alongside sustained dollar selling by exporters, including significant forward sales in June.
Earlier this week, the won had already strengthened on expectations of policy support. July’s consumer price index (CPI) eased to 2.8% year-on-year, below the 3.0% consensus, driven by softer energy prices. However, core CPI rose to 2.6%, signaling persistent underlying inflation pressures.
Commerzbank economists expect the Bank of Korea to deliver one more 25-basis-point rate hike this year, aligning with its latest median policy rate projection of 3.0%. Inflation is forecast to rise sharply in August due to base effects before easing gradually.