South Korean Won: Strength extends on intervention talk against US Dollar – Commerzbank
Commerzbank economists highlight ongoing Korean Won (KRW) appreciation against the Dollar. USD/KRW slipped 0.1% to 1,430, extending declines from earlier in the week.
South Korean Won (KRW) has strengthened against the US Dollar (USD), with Commerzbank economists attributing the KRW's rise to coordinated intervention by the Ministry of Economy and Finance, Japan, and sustained exporter dollar selling. The weakness in the USD was further fueled by a surprise July CPI decline to 2.8% year-over-year, driven by softer energy prices, while core CPI remained elevated at 2.6%.
The Bank of Korea is expected to continue tightening monetary policy, with another 25 basis points rate hike anticipated this year. The persistent inflation outlook and financial stability concerns will likely keep the BoK's tightening bias in place.
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