Asian equity markets have been strong. Semiconductor-heavy indices in South Korea and Taiwan have led gains. Investors are still focused on AI-linked companies, and Asian exporters have performed well.
Early February export data from South Korea was solid. Along with policies aimed at bringing export-related foreign currency earnings back onshore, this has boosted expectations for a stronger won.
Won Strength Supported By Exports
ING expects USD/KRW to fall to 1425 by the end of March. The call is based on strong exports and policy steps designed to pull capital and FX earnings back into Korea.
US equities have mostly traded sideways. The S&P 500 has moved between 6775 and 7000 since the start of the year. Nvidia’s upcoming earnings are seen as a key near-term catalyst.
The article was produced using an AI tool and reviewed by an editor.
In early 2025, the view was that the AI-led semiconductor boom would lift Korean equities and support the won. That view leaned on strong export data, and the trend has largely continued this year. Semiconductor exports have posted double-digit year-over-year growth for most of the past 12 months, reinforcing the underlying strength.
Derivative Positioning For A Stronger Won
That forecast projected USD/KRW would drop to 1425. With the pair now around 1395, the call for a stronger won was directionally correct. The main drivers remain intact. In addition, Korea’s corporate governance reforms—often called the “Corporate Value-up Program”—are helping keep capital onshore. With these tailwinds, the most likely path for USD/KRW still appears to be lower.
For derivatives traders, this points to positioning for further declines in USD/KRW. One approach is to buy put options, which gain value if the exchange rate falls below the strike price. Another is a bearish put spread, which reduces upfront cost while keeping exposure to a moderate won appreciation.
This view is supported by steady global demand for AI-related technology, which benefits major Korean exporters. The KOSPI has risen more than 7% since the start of the year, reflecting positive equity sentiment. If this strength persists, it should continue to support the won versus the dollar in the coming weeks.
Traders should still watch for volatility from external catalysts, such as upcoming US inflation data. Options offer defined risk, helping traders participate in expected won strength while limiting losses if the move reverses. Implied volatility has remained low, around 7–8%, which keeps option premiums relatively inexpensive for hedging or speculation.
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