The South Korean won continued its recent decline, approaching 1,350 per dollar, as it trades near its lowest levels in over seven weeks. This dreciation comes in the wake of ongoing U.S. dollar strength, driven by robust labor market data from the United States.
The stronger-than-expected U.S. jobs rort alleviated concerns surrounding the labor market and diminished the urgency for significant U.S. rate cuts. This situation further amplified the dovish outlook from the Bank of Korea, where slowing price growth has led to expectations of a policy rate cut this week—the first in over four years.
Consumer inflation in South Korea declined to 1.6% in Stember, the lowest since early 2021 and significantly below the market consensus of 1.9%. Additionally, South Korea’s foreign reserves increased to $420 billion by the end of Stember, ranking ninth globally with $373.3 billion in securities and $22.3 billion in dosits.
On Monday, October 7, the USDKRW decreased by 2.9400, or 0.22%, closing at 1,343.9300 compared to 1,346.8700 in the previous session. Experts predict the South Korean Won could settle at 1,335.95 by the end of this quarter, with estimates suggesting it may trade at 1,389.62 in twelve months.