Societe Generale analysts report that the South Korean Won (KRW) has appreciated by 12% against the US Dollar year-to-date, with the USD/KRW exchange rate dropping from approximately 1560 in early June to below 1380 [1]. This significant strengthening is attributed to optimism in the AI and semiconductor sectors, as well as substantial buyback-related dollar selling [1]. The analysts highlight that the KRW has been a leading performer among major Asian currencies in 2024, benefiting from the broader 'sell USD' trend that intensified after Liberation Day tariffs in the second quarter of 2025, which saw USD/KRW retreat to 1350 [1].
Key figures supporting the KRW's rally include large buyback announcements from Samsung ($80 billion) and SK Hynix ($28 billion), which have generated won conversion flows and additional dollar selling pressure [1]. The report also notes that SK Hynix's ADR-related dollar inflows in July provided further support for the currency [1].
Societe Generale maintains a tactical view that USD/KRW remains a sell on rallies, with further support expected from anticipated month-end exporter dollar sales [1]. The analysts caution that while the move in USD/KRW appears stretched, the underlying enthusiasm for Korea's tech sector and ongoing corporate actions continue to underpin the won's strength [1].
CONCLUSION
The South Korean Won's 12% year-to-date gain against the US Dollar is underpinned by robust tech sector flows and major corporate buybacks. Societe Generale sees continued support for the KRW, recommending a tactical sell on USD/KRW rallies, especially with further exporter flows expected.