17-year lows: South Korean Won in a downward spiral

USD/KRW extends its five-day winning streak, trading around 1,540 after hitting 1,549, a level previously seen in March 2009, during the Asian hours on Friday. The South Korean Won continues to decline despite explicit pledges from government officials to curb excessive market volatility.

The KRW’s ongoing weakness highlights the severe pressure on the currency as geopolitical conflict involving Iran persists, with surging oil prices and stalled peace talks driving global capital reallocation.

South Korea's central bank has signaled an imminent pivot toward a more restrictive monetary policy stance to combat rising inflation, while the country's finance minister has vowed to deploy targeted measures to stabilize the foreign exchange market.

South Korea’s economic fundamentals remain notably robust, even as its current account surplus moderated to $28.29 billion in April 2026. While down from the marginally revised, all-time high of $37.93 billion recorded the previous month, April's figure still marks the second-largest monthly surplus on record. This slight month-over-month decline was primarily driven by a narrowing of the goods surplus to $33.88 billion from March's $35.68 billion, even though outbound shipments remained incredibly strong, with exports surging 54.5% year-over-year to easily outpace a 16.1% increase in imports.

Simultaneously, the USD/KRW pair has appreciated as the US Dollar maintains a firm footing on global markets. Foreign exchange traders are actively assessing a complex web of developments surrounding a potential US-Iran peace agreement to end recent hostilities. Tensions remain highly elevated following warnings from Iranian Foreign Minister Abbas Araghchi, who declared that the strategic Strait of Hormuz falls within Iranian and Omani territorial waters and asserted that US regional military bases are active targets for retaliation.

(The story was corrected on June 5 at 3:55 GMT to say in the title 17-year highs and not months.)