Won Surges 4.27% as SK Hynix ADR Listing Fuels Dollar Liquidity

The South Korean won has seen significant gains in July, outperforming other major currencies. The dollar-won exchange rate fell to its lowest level since May 11 at 1,472.4 before rebounding to 1,486.0 on July 18. This decline of 70.9 won from the end of last month was the largest since November 2022.

The won's appreciation is largely driven by expectations that $26.5 billion raised through SK Hynix's ADR listing will be released into the market in stages, injecting dollar liquidity and supporting the currency. Hanwha Ocean's forward dollar sales and a slowdown in foreigners' net selling of local stocks have also contributed to the won's strength.

Despite the won's gains, forecasters remain cautious due to rising U.S. interest rates and a weak stock market, which may limit risk appetite and constrain the crypto market. However, if domestic capital inflows recover and interest rate pressures ease, the market is expected to see a moderate rebound.