SEOUL, September 07 (AJP) - The South Korean won climbed to its strongest level against the greenback in nearly 23 months Monday as exporters rush to convert their dollar holdings for fiscal settlement.
The USD/KRW exchange rate traded at around 1,335.9 won as of 10 a.m. The pair entered the 1,330 range for the first time since Oct. 4, 2024, when the exchange rate traded between 1,331 and 1,335 won before closing daytime trading at 1,333.7 won.
The won's advance stood out against a firmer U.S. dollar after stronger-than-expected U.S. employment data revived expectations that the Federal Reserve could raise interest rates this month.
U.S. nonfarm payrolls increased by 162,000 in August, nearly three times the 56,000 increase economists had expected, while the unemployment rate held at 4.1 percent.
Financial markets raised the probability of a quarter-percentage-point Fed rate increase at its Sept. 15-16 meeting to about 62 percent after the report, while the dollar and U.S. Treasury yields rose.
Korea-specific dollar supply continued to offset those external pressures, with semiconductor exporters bringing in large amounts of overseas earnings as the country's export boom accelerated.
South Korea's cumulative exports reached $709.4 billion in early September, already surpassing the record for the whole of 2025. Semiconductor exports surged 169.6 percent from a year earlier to $281 billion in the first eight months of this year.
Exporter dollar selling has remained a major source of supply in the local foreign exchange market, although companies have also accumulated record dollar deposits as the won strengthened and some exporters delayed converting proceeds.
Foreign equity inflows added support Monday as Korean semiconductor shares rallied, with foreign investors turning net buyers of the benchmark KOSPI in early trading.
The won's rally also persisted despite authorities having absorbed about $20 billion of dollar proceeds repatriated from SK Hynix's U.S. American depositary receipt issuance through off-market transactions. The transactions reduced the amount of dollar supply that could have reached the spot market directly.
The exchange rate had only entered the 1,340 range on Friday for the first time in about 14 months, as the won's appreciation accelerated.
AJP Takeaways:
- South Korea's won strengthened into the 1,330-per-dollar range for the first time in nearly 23 months, trading at 1,335.9 won as of 10 a.m.
- Korean exporters continued to supply dollars to the local foreign exchange market as strong semiconductor exports increased overseas earnings available for conversion into won.
- Federal Reserve rate-hike expectations rose after stronger-than-expected U.S. employment data, but Korea-specific dollar supply outweighed broader support for the U.S. currency.
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