South Korean won slumps to weakest level against US dollar since 2009 financial crisis

The South Korean won has depreciated sharply against the US dollar, tumbling to 1,561.5 won per dollar. This marks the lowest valuation for the South Korean currency since 2009, a period defined by the height of the global financial crisis, AzerNEWS reports.

According to reports from South Korean media outlets, the severe downward pressure on the won is being driven by a combination of aggressive foreign capital outflows from the domestic stock market and prolonged geopolitical instability in the Middle East. Seeking lower risk, foreign investors have maintained a steady sell-off of South Korean equities, accelerating the local currency's decline.

Compounding the won's weakness is a broader, aggressive rally of the greenback. A robust US jobs report released on June 5 indicated that labor market conditions in the United States remained unexpectedly tight through May. This data has heavily reinforced market expectations that the US Federal Reserve will keep its benchmark interest rates elevated for a longer duration than previously anticipated.

Spurred by these hawkish economic indicators, the US Dollar Index—which tracks the performance of the greenback against a basket of six major global currencies—surpassed the crucial 100-point threshold for the first time in two months, further cementing the dollar's dominance and squeezing emerging market assets.