The South Korean won traded around 1,355 per dollar, extending gains to its strongest level since early July 2025, as easing expectations for another US rate hike weakened the dollar and lowered Treasury yields. Fed Governor Christopher Waller indicated support for keeping rates steady if inflation continues to cool, prompting markets to reduce the probability of a September hike to around 50% from 63% previously. The 10-year Treasury yield fell after reaching its highest level since November 2023. Additionally, South Korea posted a strong external balance, with the current account recording a $42.08 billion surplus in July, the second-largest monthly surplus on record and the largest ever recorded for July, with semiconductor-led goods exports remaining robust. However, renewed US plans for targeted semiconductor tariffs linked to companies’ domestic production could weigh on the currency outlook, given the importance of chip exports to Korea’s trade balance.