South Korean Won: Weak KRW and hawkish BoK expectations – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank highlights strong South Korean export momentum, led by semiconductors and petroleum, but notes that South Korean Won (KRW) remains one of Asia’s weakest currencies versus the Dollar. The Bank of Korea (BoK) is expected to raise its policy rate by 25bp to 2.75% in July, having adopted a more hawkish tone as financial stability and inflation risks gain prominence.

Won underperforms despite export strength

"On monetary policy, the Bank of Korea (BoK) is expected raised the policy rate by 25bp to 2.75% at its next meeting on 16 July."

"BoK have adopted a more hawkish tone in recent weeks, with BoK Governor Shin Hyun-song stating that BoK should raise rates “before it's too late”. BoK meeting minutes also show a rising urgency to tighten policy as financial stability risks from the financial and housing markets mount."

"Furthermore, several members suggested that inflationary risks have outpaced growth risks. They noted that the strong semiconductor sector have offset the drag from the Middle East conflict."

"In FX, USD/KRW rose 0.4% to 1,537 yesterday, driven by a stronger USD. KRW is the second-weakest performing currency in Asia this year, falling 6.4% vs the USD compared to the average for Asian currencies ex-Japan of -2.9%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with two-day lows near 1.3180

GBP/USD remains on the back foot in the latter part of Tuesday’s session, sliding to the sub-1.3200 area and challenging weekly lows. Cable’s decline comes as investors assess the political uncertainty in the UK, coupled with softer-than-expected UK PMI data and the better tone in the Greenback.

EUR/USD remains offered around 1.1380

EUR/USD keeps the bearish tone well in place on Tuesday, revisiting the 1.1380 region for the first time since June 2025. The continuation of the move higher in the US Dollar coupled with mixed PMI readings from Germany and the Eurozone keeps the pair’s downside unchanged for now.

Gold appears supported near $4,100 for now

Gold rapidly reverses Monday's bounce and is trading sharply lower on Tuesday. The yellow metal, however, manages well to keep business above the $4,100 mark per troy ounce despite a firmer US Dollar and expectations that the Fed will keep rates higher for longer.

MiCA regulations could be the next bullish catalyst for crypto – Georg Harer, co-CEO at Bybit EU

The cryptocurrency market is losing momentum and liquidity due to the lack of a bullish catalyst. In an exclusive interview with FXStreet, Georg Harer, co-CEO at Bybit EU, says that the Markets in Crypto-Assets (MiCA) regulations could inject liquidity into the crypto market from traditional fund houses.

"Rearranging the deckchairs on the Titanic": UK's fiscal crisis outlasts another Prime Minister

Keir Starmer's resignation as the UK Prime Minister comes ten years after the Brexit referendum vote, a coincidence that financial markets have been quick to note. The British Pound trades around 1.3220 against the US Dollar on Thursday.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.