The South Korean won strengthened above 1,450 per dollar, rallying for the fourth consecutive session and hitting an over three-week high, as traders weighed the Bank of Korea’s latest monetary policy decision. The central bank unexpectedly held its key rate at 3% in its first 2025 meeting, defying expectations of a 25-basis-point cut following two cuts in October and November. This decision aimed to stabilize the weakening currency, which has been pressured by a strong US dollar and political turmoil after President Yoon’s brief martial law declaration in December. Meanwhile, after his arrest by the CIO on Wednesday, impeached President Yoon faces intense questioning and the potential for a parliamentary special counsel probe. Externally, the won found support from a broad US dollar weakness, as a cooler-than-expected inflation report fueled expectations of two Federal Reserve rate cuts this year.
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