Korean Won Breaches 1,560 Per US Dollar for First Time Since 2009

The South Korean won experienced a significant depreciation, falling below the 1,560 won-per-US-dollar mark during overnight trading on June 6. This marks the weakest level for the currency in over 17 years, not seen since the throes of the global financial crisis in March 2009.

The currency's sharp decline accelerated around 9:30 p.m. following the release of US employment data, which indicated a stronger-than-anticipated labor market. This news bolstered the US dollar, pushing the US Dollar Index above 100 for the first time in two months and consequently pressuring the won.

During the session, the won touched an intraday low of 1,561.5 against the dollar, surpassing the psychologically important 1,550 and 1,560 levels. This downward pressure is attributed to a combination of factors, including sustained selling of Korean equities by foreign investors and the ongoing conflict in the Middle East, which typically drives demand for safe-haven assets like the dollar.

The robust US jobs report has reinforced expectations that the US Federal Reserve may maintain higher interest rates for an extended period, further contributing to the dollar's strength and the won's weakness. The currency closed daytime trading on June 5 at 1,539.1 won per dollar, having weakened 19.9 won by the close of overnight trading at 2 a.m. on June 6.