May 27, 2025
SEOUL – The Korean currency climbed into the 1,360 won range against the US dollar on Monday, gaining value to reach a seven-month high at the closing quote. With the won strengthening, the Bank of Korea is expected to carry out a rate cut this week.
The local currency was quoted at 1,364.4 per dollar as the daytime market closed Monday, appreciating by 7.1 won from the previous after-hours trading session. It was the strongest closing value of the won against the dollar since October.
The won remained strong throughout the day. As of Monday’s opening, the won was quoted at 1,369 per dollar, also marking a seven-month high at the opening quote.
After briefly weakening to 1,371 won during the early trading hours, the won reversed course and strengthened to 1,360.4 won per dollar. Even after daytime trading wrapped up, the won remained solid, trading at 1,366.62 per dollar as of 5 p.m.
The won’s gain came on the back of the dollar losing faith following the Trump administration’s flip-flop over the implementation of a 50 percent tariff on EU imports.
The dollar index, a key measure of the greenback’s strength, remained at around 98 on Monday, marking a drop from fluctuations at roughly 101 earlier in the month.
In recent weeks, the won has been gaining momentum as markets anticipate that Korean foreign exchange authorities may allow its appreciation as part of broader trade talks with the US.
While a news report in local The Korea Economic Daily on Wednesday suggested that the US had requested that Korea implement measures to strengthen the won as part of trade talks, Korean forex authorities denied the claim.
“The two countries share a mutual understanding on the principles of forex market operations and exchange rate policies and are discussing a range of negotiation agendas,” the Finance Ministry said Thursday.
“Nothing has been specifically decided at this stage, and discussions are still ongoing.”
Meanwhile, the won’s recent appreciation provides the Bank of Korea with more room to cut its base rate by a quarter percentage point, as it currently stands at 2.75 percent. The central bank has been under pressure to ease monetary policy to support the economy, which contracted by 0.2 percent in the first quarter of this year.
While BOK Gov. Rhee Chang-yong has previously cited currency volatility as a key concern, the recent strengthening of the won could ease that pressure and open the path to a rate cut.
“With strong downward pressure on the economy, the BOK is likely to leave the door open for further rate reductions even after implementing a cut this week,” said Ahn Ye-ha, an analyst at Kiwoom Securities.
The central bank is scheduled to hold its next rate-setting meeting Thursday.