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South Korean won rallies as USD/KRW falls toward 1,500

Societe Generale links the won’s rebound to FX conversion flows tied to SK Hynix ADRs and expectations for a 25 bp Bank of Korea hike to 2.75%.

Reported · Written up by our desk · Major Pairs

South Korean won strength in early H2 pushed USD/KRW lower, with the pair dropping from around 1,550 to near 1,500, lifting the won by nearly 2.8% during the period, according to a Societe Generale note highlighted by FXStreet.

Societe Generale said the move follows profit taking in the KOSPI after KRW had weighed on markets earlier in the year, when foreign investors trimmed equity exposure to manage concentration risk.

The bank attributed part of the recent outperformance to FX conversion flows connected to SK Hynix ADRs, which supported demand for the won even as equity dynamics shifted.

Looking ahead, the strategists cited expectations of a 25 bp Bank of Korea hike, taking the policy rate to 2.75%, as another factor behind the currency’s early-H2 rally.

Latest closeKospi 7,656.31 ▼4.9%

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