South Korean Won Falls on Dollar Strength

The South Korean won weakened to around 1,390 per dollar on Friday, extending losses for a second session, as the dollar held firm following a stronger-than-expected US PPI data. The US wholesale prices in July rose 0.9% in from the previous month, the sharpest increase in three years, and 3.3% from a year earlier, both well above market forecasts. The figures prompted investors to scale back expectations for a larger half-point Federal Reserve rate cut in September, though a smaller 25-basis-point cut remains widely anticipated. On the domestic front, investor sentiment was dampened by a prolonged downturn in manufacturing activity, with key export-oriented sectors such as petrochemicals, steel, and autos facing weak demand, heightened foreign competition, and oversupply pressures. Persistent softness in these industries has raised concerns over Korea’s export outlook.