Won hits strongest level in about 5 months after Fed sends mixed signals

By Kim Yeon-jae Posted : July 30, 2026, 17:43 Updated : July 30, 2026, 17:43
An employee sorts U.S. dollar and South Korean banknotes at Hana Bank in Seoul on July 10, 2026. AJP Yoo Na-hyun
SEOUL, July 30 (AJP) - The South Korean won strengthened to its highest level in about five months on Thursday, while government bond yields rose as currency and fixed-income markets drew contrasting signals from the Federal Reserve's latest policy decision.

The won closed daytime trading at 1,437.4 per dollar, strengthening by 9.3 won from the previous session's close of 1,446.7.

The currency traded between 1,435.9 and 1,447.7 during the session before returning below the 1,440 mark, finishing at its strongest closing level since Feb. 26.

The Fed kept its benchmark rate unchanged at 3.50 to 3.75 percent, but three policymakers voted for a quarter-point increase, marking an unusually sharp split within the rate-setting committee.

Currency traders, however, viewed Chair Kevin Warsh's remarks at a press conference as less hawkish than expected and scaled back bets on a September rate hike, while dollar inflows from SK hynix's American depositary receipt (ADR) issuance and month-end exporter selling provided additional support for the South Korean currency.

In the bond market, the three-year Korea Treasury Bond yield rose 3.1 basis points to 3.831 percent, while the 10-year yield climbed 5.4 basis points to 4.311 percent.

The gap between the two maturities widened to 48.0 basis points from 45.7 basis points, producing a bear-steepening move in which long-term borrowing costs rose faster than shorter-term rates.

The rise reflected a sell-off in global sovereign debt after the Fed meeting, with the U.S. 10-year Treasury yield approaching 4.7 percent and the 30-year yield breaking above 5.2 percent to its highest level in 19 years, suggesting investors are demanding greater compensation for persistent inflation, heavy government borrowing and the risk that interest rates remain elevated for longer.

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