The won ended the daytime session in Seoul at 1,538.90 per dollar, weakening by 1.90 won from the previous session.
The currency came under pressure as investors reassessed the Fed’s policy path after its June meeting delivered a more hawkish dot plot and a firmer message on inflation.
The dollar stayed supported by expectations that U.S. rates could remain high for longer, or even rise again, keeping markets focused on the interest-rate gap between Korea and the United States.
Weak risk sentiment added further pressure on the won. The benchmark KOSPI tumbled 9.99 percent to close at 8,203.84, with both a sidecar and a marketwide circuit breaker triggered during the session.
Foreign investors net sold 4.13 trillion won ($2.68 billion) worth of local shares, adding to pressure on the currency.
Bond yields moved lower despite the weaker won.
The three-year government bond yield fell 4.0 basis points to 3.770 percent, while the 10-year yield dropped 2.4 basis points to 4.171 percent.
A weaker won and a hawkish Fed would normally put upward pressure on Korean yields. Currency weakness can add to import-price risks, while a tighter Fed path limits the Bank of Korea’s room to ease policy.
But the scale of the equity selloff shifted the focus to risk aversion. The KOSPI’s nearly 10 percent drop, heavy foreign selling and the activation of trading curbs strengthened demand for government bonds, pushing yields lower despite continued currency weakness.
The move appeared to reflect a short-term safety bid rather than a clear shift toward expectations for easier monetary policy.
Monday’s trading left Korean markets split across asset classes. The foreign exchange market was driven by Fed concerns, dollar strength and foreign equity selling, while the bond market took its cue from risk aversion triggered by the stock rout.
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