The KRW to USD exchange rate has recently been influenced by a mix of both domestic and international factors. Analysts report that the US dollar has shown muted performance in a risk-positive environment, which has diminished its appeal as a safe-haven asset. Despite an increase in risk sentiment following better-than-expected service sector activity in the U.S., traders remain cautious ahead of forthcoming economic data, including a potentially significant decline in durable goods orders expected to weigh on the dollar.
On the other hand, the South Korean won faces considerable pressure, particularly in light of geopolitical tensions and the imposition of a 25% reciprocal tariff on South Korean goods by the U.S. This move, seen as a part of ongoing trade conflicts, has worsened the outlook for emerging Asian currencies, including the KRW. In addition, the recent imposition and subsequent lifting of martial law by President Yoon Suk Yeol stirred political instability in South Korea, causing volatility in the won. The resolution of the martial law situation temporarily stabilized the currency, allowing the KRW to recover some lost ground against the dollar.
Traders note that the KRW is currently trading at 0.000723, aligning closely with its three-month average and demonstrating some resilience with a relatively stable trading range of 6.3% from 0.000695 to 0.000739. However, the overall sentiment remains cautious as the combination of U.S. tariff threats and domestic political uncertainties create a complex landscape for the won’s future performance. Markets continue to monitor these developments closely, recognizing that ongoing shifts in U.S. monetary policy will also play a critical role in shaping the dollar's strength against the won in the coming months.