South Korea Won Falls 94.10 Won Against Dollar in July, Correlation With Yuan Strengthens

According to data from Yonhapinfomax, the Korean won weakened sharply against the dollar on July 24, falling to 1,465.10 won after reaching 1,559.20 won on July 1, marking a 94.10 won decline over the period. Meanwhile, the dollar-yen rate rose to near 164 yen, and the dollar index climbed above 101.

Despite stronger dollar and weaker yen conditions historically supporting won depreciation, the won has decoupled from the yen and increasingly aligned with the Chinese yuan this month. Analysis of daily data from July 1 to July 23 showed the won-yuan correlation coefficient at 0.67, while the won-yen coefficient stood at negative 0.61. Supply-side factors including SK Hynix converting $26.5 billion from its ADR listing and sustained dollar selling by exporters amplified downward pressure on the won.