The won gained as much as 1.3% to 1,334.70 per dollar, its strongest level since October 2024. Its relative strength index, a gauge of momentum, rose to the highest since 2013, underscoring the pace of the currency’s advance.
The rally in stocks was led by chipmakers Samsung Electronics Co. and SK Hynix Inc. on Monday, while foreign investors bought over a net 1.8 trillion won ($1.3 billion) of Korean stocks on the Kospi Index, extending inflows to a third session, according to exchange data. Continued demand for Korean assets may provide further support for the currency, though the speed of gains may be harder to sustain.
“The Korea won strength, at around 6% year to date, also looks increasingly stretched and could encourage domestic asset managers to unwind foreign-asset hedges or prompt renewed retail outbound equity investment,” Geoffrey Yu, a senior strategist at Bank of New York Mellon, wrote in a note.
The currency trimmed its gain to 0.4% against the dollar in the afternoon, after Yonhap Infomax reported that the National Pension Service had halted its foreign-exchange hedging and resumed dollar purchases. The pension fund declined to comment when contacted by Bloomberg News.
“With long-won positions having built up broadly in recent weeks, the report was seen as a signal that authorities may be growing uncomfortable with the pace of the currency’s gains, prompting dollar short-covering,” said Paik Seokhyun, an economist at Shinhan Bank in Seoul.
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