Key Moments
- USD/KRW traded around 1,529.70, up 0.93%, after touching 1,536.04 – its highest level since March 2009.
- The Bank of Korea stated it is closely monitoring FX markets for “clear herd-like behaviour” but is not aiming for any specific exchange rate level.
- The US Dollar Index hovered near 100.50, signaling that the USD/KRW spike has been driven mainly by Korean Won weakness.
Won Under Heavy Pressure as USD/KRW Extends Rally
USD/KRW advanced sharply on Tuesday, with the pair dealing near 1,529.70 at the time of writing, a gain of 0.93% on the session. Earlier in the day, it reached an intraday high of 1,536.04, marking its strongest level since March 2009. The move points to a pronounced slide in the Korean Won (KRW), rather than a broad upswing in the US Dollar (USD).
The US Dollar Index (DXY) – which tracks the Greenback against six major currencies – was nearly unchanged around 100.50. The relatively flat performance of the DXY underscores that the latest jump in USD/KRW is being driven predominantly by selling pressure on the Korean currency.
Bank of Korea Tracks Market for Herd Dynamics
Comments reported by Reuters from the Bank of Korea (BoK) signal growing unease about the KRW’s rapid decline. A BoK official said the institution is “closely watching the foreign exchange market situation” and cautioned that policymakers could step in if they detect “clear herd-like behaviour” in trading.
The same official stressed that the central bank is not pursuing a predefined level for the exchange rate, even as the KRW’s recent fall has been “much faster than other currencies”. The BoK indicated that the pace of depreciation accelerated following earlier remarks from the nominee for the next BoK governor.
Dollar Supported by Geopolitics, Capped by Fed Signals
Broader USD sentiment has been underpinned by geopolitical developments, though the DXY showed only modest intraday movement. According to a report from the Wall Street Journal, US President Donald Trump is considering ending the military campaign in Iran even if the Strait of Hormuz remains largely shut. That possibility briefly improved risk appetite.
On the policy side, Federal Reserve (Fed) Chair Jerome Powell tempered expectations for a near-term interest rate increase on Monday, indicating that inflation pressures remain contained for now. His remarks weighed on US Treasury yields and curbed upside potential for the US Dollar, even as certain currencies, including the Korean Won, continued to weaken significantly.
US Dollar Performance Against Major Currencies
The table below presents the intraday percentage changes of the US Dollar against a set of major currencies. On the day, the USD showed its largest relative strength versus the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.00% | -0.16% | -0.10% | 0.11% | -0.14% | 0.13% | 0.05% | |
| EUR | -0.00% | -0.14% | -0.05% | 0.15% | -0.11% | 0.15% | 0.09% | |
| GBP | 0.16% | 0.14% | 0.08% | 0.31% | 0.04% | 0.30% | 0.24% | |
| JPY | 0.10% | 0.05% | -0.08% | 0.21% | -0.05% | 0.21% | 0.17% | |
| CAD | -0.11% | -0.15% | -0.31% | -0.21% | -0.26% | 0.00% | -0.05% | |
| AUD | 0.14% | 0.11% | -0.04% | 0.05% | 0.26% | 0.27% | 0.20% | |
| NZD | -0.13% | -0.15% | -0.30% | -0.21% | -0.00% | -0.27% | -0.07% | |
| CHF | -0.05% | -0.09% | -0.24% | -0.17% | 0.05% | -0.20% | 0.07% |
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