Societe Generale analysts report that the USD/KRW currency pair failed to break above its June peak near 1,561, leading to a steady decline toward the 2024–2025 highs, with the 200-day moving average (200DMA) around 1,475 acting as a crucial support level. Previous declines in February and May also bottomed out near this moving average, suggesting its significance for near-term price action. The analysts see potential for a short-term rebound if the 200DMA holds, while anticipating the Bank of Korea (BoK) to tighten policy by 25 basis points to 2.75% in order to counter inflation [1].
The South Korean Won (KRW) has outperformed other Asian currencies halfway through July, posting a 4% total return against the US dollar, while the Indian Rupee (INR) lagged with a 1.2% decline in total return. USD/KRW retraced to 1,488 after peaking at 1,559 on July 1, with the 200DMA at 1,475 remaining a key technical level [1].
Market flows have been influenced by FX conversion linked to the ADR listing of SK Hynix, which offset corrections in the Kospi index and foreign portfolio investment (FPI) outflows. Local market participants noted significant dollar selling by Korean chipmakers and shipbuilders this week. Additionally, reports indicate that Samsung is in early discussions regarding a potential US share sale, which could further support the KRW [1].
Societe Generale expects the BoK to tighten policy by 25bp to 2.75% tomorrow to address inflation concerns. BoK data shows that non-resident sales of Korean equities and bonds totaled $100.93 billion in the first half of 2026 [1].
CONCLUSION
The South Korean Won has demonstrated strong performance, supported by corporate dollar selling and expectations of monetary tightening by the Bank of Korea. Technical support at the 200DMA and potential policy action are seen as key factors for near-term stability and possible rebound. Market participants are closely watching these developments for further direction.