KRW Rises 12% vs USD Amid AI and Semiconductor Optimism

The South Korean Won (KRW) has gained significant strength against the US Dollar this year. According to Societe Generale analysts, USD/KRW has fallen from around 1560 in June to below 1380, with a gain of 12% versus the Dollar year-to-date.

This move is attributed to optimism surrounding the AI and semiconductor sectors, as well as large buyback-related Dollar selling. The analysts note that the KRW was one of the key beneficiaries of the 'sell USD' theme post Liberation Day tariffs in 2Q25, when markets aggressively repriced US exceptionalism.

The analysts also highlight sizeable buyback announcements from Samsung ($80bn) and SK Hynix ($28bn), with associated won conversion flows potentially generating additional Dollar selling. As a result, USD/KRW remains a tactical sell on rallies in their view, boosted by anticipated month-end exporter dollar sales.

While the move appears stretched, it illustrates enthusiasm for the AI and semiconductor sectors. The analysts argue that this trend is expected to continue, driven by the strong performance of these sectors.