The USD to KRW exchange rate has shown significant strength, recently reaching 90-day highs near 1443 KRW per USD, which is 2.6% above the three-month average of 1406 KRW. This fluctuation suggests a relatively stable range over recent weeks, with values trading between 1379 and 1443 KRW.
Recent data has supported the US dollar's strong position against the South Korean won. Analysts noted that stronger-than-expected employment figures and ISM services PMI in the US have bolstered confidence in the USD. However, market risks and sentiments can soon shift, potentially impacting its trading stance.
Several key factors are also influencing the current landscape for the US dollar. The transition in Federal Reserve leadership is crucial to its future direction, especially as inflation data is anticipated, which could influence monetary policy decisions. Additionally, persistent trade tensions with China may continue to lend the USD safe-haven appeal in uncertain times. Global dedollarization efforts are emerging as a longer-term concern, along with the implications of the Mar-a-Lago Accord, which aims to recalibrate international economic relationships while maintaining the USD's reserve currency status.
On the other hand, the South Korean won is facing challenges, particularly from ongoing foreign exchange interventions by the Bank of Korea, which sold a net $800 million to support the KRW in the second quarter of 2025. Adding to the pressures, stalled trade negotiations with the US over a sizable investment package could exert further downward pressure on the currency. Market analysts foresee the potential for the KRW/USD exchange rate to reach 1,430 KRW within the year, particularly if growth forecasts from the Bank of Korea are lowered.
The interplay between these macroeconomic indicators and geopolitical developments suggests that the USD may maintain its strength against the KRW in the near term. However, market participants should stay vigilant of any shifts in sentiment that may arise from economic data releases or changes in trade relations, as these could significantly influence the USD-KRW dynamic in the months ahead.
