South Korean Won Holds Firm Amid Dollar Softness, Policy Risks

The South Korean won rose to around 1,385 per dollar on Tuesday, reversing losses from the previous session due largely to the dollar’s weakness. Signs of a cooling US labor market strengthened Fed cut bets, pressuring the dollar and supporting Asian currencies. Domestically, sentiment was tempered after Seoul expressed deep regret over a US immigration raid at a Hyundai–LG battery plant, raising concerns about diplomatic friction for Korean firms in the US. Authorities pledged to safeguard corporate interests abroad, though investors remained cautious as the issue highlighted vulnerabilities in cross-border investment ties. At the same time, policymakers continued discussions with Washington on tariffs and investment rules, underscoring Seoul’s effort to safeguard national interests in trade negotiations. Markets also awaited key US inflation reports later this week that could guide the Fed’s policy outlook and the broader dollar direction.