09.09.202502:23:57UTC+00South Korean Won Holds Firm Amid Dollar Softness, Policy Risks

The South Korean won appreciated to roughly 1,385 per dollar on Tuesday, recovering from losses observed in the previous session primarily due to the dollar’s weakening. Indications of a cooling labor market in the US bolstered expectations for Federal Reserve rate cuts, exerting downward pressure on the dollar and bolstering Asian currencies. On the domestic front, sentiment was subdued following Seoul’s expression of deep regret over a US immigration raid at a Hyundai–LG battery facility, which heightened concerns about diplomatic tensions for Korean businesses operating in the US. In response, authorities vowed to protect corporate interests abroad, although investors remained wary as the incident underscored vulnerabilities in international investment relations. Concurrently, policymakers continued dialogues with Washington concerning tariffs and investment regulations, highlighting Seoul’s determination to protect national interests during trade negotiations. Additionally, markets were anticipating critical US inflation data later in the week, which could influence the Federal Reserve’s policy direction and the overall trajectory of the dollar.