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South Korean won strengthens as growth and AI exports boost confidence

ING links USD/KRW easing from June’s 1560 high to a broader AI-led export recovery and a July Bank of Korea rate hike to 2.75%

Reported · Written up by our desk · Major Pairs

ING, via FXStreet, said South Korea’s earlier massive portfolio outflows and a weaker won drove USD/KRW as high as 1560 in June, even as the country posted a large current account surplus.

The outlet attributed a partial turnaround in the currency to policy measures, including changes to National Pension Service hedging and access to Bank of Korea FX liquidity, plus a growth rebound supported by an AI-led export boom.

ING also pointed to a July Bank of Korea rate hike of 25 basis points to 2.75%, alongside what it described as greater exporter confidence to repatriate foreign earnings, while the current account surplus could run as high as $50 billion on a monthly basis.

Despite the improvement, ING said it sees limited need for USD/KRW to move much below 1400 for now, adding that foreign selling of Korean equities remains an overhang, and said Korea’s shift could offer a policy lesson for Japan’s domestic investment conditions.

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