Korean won slips to 1337.7 per dollar even as KOSPI jumps 6.6%
The South Korean won lost ground against the dollar, with USD/KRW climbing 14 won to close in Seoul at 1337.7, despite a 6.6% semiconductor-driven surge in the KOSPI index, OCBC strategists Sim Moh Siong and Christopher Wong noted.
Overnight trading pushed the pair as high as 1344 before it eased back to around 1341, according to OCBC’s analysis. Overseas investors turned net buyers of Korean shares during the stock rally, but this did not carry through into currency strength for the won.
OCBC linked the mismatch largely to a record wave of dollar futures buying by foreign participants, who took on roughly 144,300 contracts worth close to $1.44 billion in notional value, citing Yonhap Infomax data. Market chatter pointed to the activity reflecting unwinding of short dollar positions and hedging against growing Korean stock holdings, with some also pointing to possible worries about dividends flowing overseas after a major domestic firm unveiled a large shareholder payout plan.
According to the bank, the sheer volume of futures purchases likely outweighed any lift the currency might have gotten from equity inflows, underscoring that a rising Korean stock market doesn’t guarantee a stronger won. OCBC framed this as evidence that currency positioning and stock flows can pull in opposite directions even as enthusiasm around AI-related trades builds.
From a chart perspective, OCBC pointed to a mildly bullish shift in daily momentum for USD/KRW, with the RSI indicator climbing, and said another short squeeze remains possible even though its own bias favors fading the rebound. The firm identified resistance levels at 1348 and 1354 (the 50-day moving average), with support seen at 1332 and 1321, which marks a recent low.
The bank cautioned against reading too much into one day’s trading, observing that domestic investors’ purchases of overseas equities had been a key driver of dollar demand during the first half of 2026, even though the current flow pattern looks different from that period. OCBC said it would track overall dollar trends and whether overseas dollar futures buying continues before determining if the won can find its footing.
For currency watchers, the situation demonstrates how hedging activity and derivatives positioning can outweigh stock-market sentiment in shaping USD/KRW movements — a pattern worth monitoring for anyone following Asian currencies and dollar trends more broadly.
Source: FXStreet