Won Surges Past 1,400 Level as Fed Rate Hike Expectations Wane

The South Korean won strengthened to its strongest level in over 11 months on Wednesday, surpassing 1,400 won per dollar. The currency was quoted at 1,397.7 won to the U.S. dollar at 3:30 p.m., up 14.1 won from the previous trading day's close.

The won's appreciation is partly attributed to subdued expectations of a rate hike by the Federal Reserve following better-than-expected U.S. economic data. Additionally, long-dated U.S. bond yields rose to their highest levels in decades, contributing to the won's gain.

Moon Jeong-hee, an economist at KB Kookmin Bank, noted that the won's appreciation seems to be caused by dollar selling by exporters, while demand for the U.S. currency remains weak.