Korean Won Continues to Weaken on First Day of 24-Hour Trading, Down 6% Year-to-Date
0xBroomberg
South Korea on July 7 launched round-the-clock USD/KRW trading, its biggest FX structural reform in decades — but the won kept weakening on day one, down roughly 6% year-to-date and among the world's worst-performing currencies.
What exactly changed with 24-hour trading?
The won market previously operated about 17 hours a day (9 a.m. to 2 a.m. local time). It now runs 24 hours on business days, with no break.
In plain terms = traders in New York and London used to wait for Seoul to "open the door." Now they can trade the won at any hour.
This is a centerpiece of South Korea's bid for MSCI developed-market index status — restricted market access was the main barrier, and 24-hour trading formally removes it.
Why did the first day disappoint?
USD/KRW opened at 1,527.41, then climbed to 1,534.15 — up about 0.3% from Friday's New York close. The won weakened further.
Year-to-date, the won has lost roughly 6%, making it one of the world's weakest currencies.
This means → the new mechanism alone did not reverse the won's slide. The market's hope that "structural reform = instant boost" fell flat.
Why does the won keep falling?
OCBC strategists Sim Moh Siong and Christopher Wong point to portfolio flows, not deteriorating trade fundamentals, as the main driver.
In plain terms = Korea's exports haven't worsened — foreign investors are steadily selling won-denominated assets while the dollar strengthens broadly. Those two forces together are pushing the won down.
Korean investors are also scaling up overseas investments, which adds to dollar demand — domestic capital is effectively "voting with its feet" into the greenback.
What would it take for the won to stabilize?
The two strategists name three conditions: ① foreign investors slow their selling of Korean equities; ② the dollar loses upward momentum; ③ U.S. Treasury yields pull back more visibly.
This means → the won's fate largely lies outside Seoul's control — it hinges on the dollar's trajectory and global capital flows.
Whether 24-hour trading ultimately delivers an MSCI developed-market upgrade remains the market's key checkpoint — the mechanism is in place, but the outcome has not materialized.
Content is for reference only, not financial advice.