South Korea’s won may grind stronger over the next two years, with OCBC forecasting the dollar at 1,320 won by end-2026 and 1,260 by end-2027 as exports, chip demand and global risk appetite underpin the currency.
South Korea won forecast rises on exports and chips
That outlook matters because it points to a steady, but not linear, improvement in Korea’s external position at a time when trade flows are doing much of the heavy lifting for growth. A firmer won would ease imported inflation, support domestic purchasing power and potentially temper the burden of energy and raw-material imports, while also shaping returns for foreign investors in Korean assets and exporters that manage dollar revenues.
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FXStreet said strategists Sim Moh Siong and Christopher Wong see resilience in exports and AI-linked semiconductor demand as the main supports for the won. South Korea’s trade data underscore that thesis: October exports jumped to $115.28 billion, the second-highest monthly total on record, while semiconductor shipments surged 259.4% from a year earlier to $56.44 billion. After adjusting for working days, daily exports were still up 76%, showing the rebound was not just a calendar effect.
The export surge is economically important because it gives Korea a rare combination of stronger external demand and a healthier current-account backdrop even as the domestic economy remains exposed to oil prices and global financing conditions. Energy imports rose 63.1% in October as crude import values climbed on higher prices, but the scale of semiconductor earnings more than offset the worsening energy bill. That mix supports the won in the medium term, though it also leaves the currency vulnerable to swings in oil, tech demand and global credit conditions.
OCBC’s forecast also fits a broader market backdrop in which U.S. yields remain elevated but are no longer breaking materially higher. The 10-year Treasury yield was around 4.93% in the bank’s Nov. 2 outlook, while the Federal Reserve had kept rates in the 3.75% to 4% range. That keeps dollar support in place, but not strong enough on its own to overwhelm Korea’s trade surplus dynamics if chip exports stay firm.
Still, the path to 1,260 looks uneven rather than smooth. OCBC flagged global risk sentiment and portfolio flows as key risks, and those are the channels most likely to interrupt a gradual won recovery. When risk aversion rises, the dollar usually catches a bid and Asian currencies come under pressure. A strong export cycle can cushion that move, but it rarely eliminates it.
For investors, the implication is that the won’s upside may be driven more by fundamentals than by a broad dollar collapse. That tends to favor selective exposure to Korean exporters with natural hedges and disciplined capital allocation, while reducing the attractiveness of unhedged foreign inflows into Korean bonds if the currency appreciates more slowly than expected. For importers and domestic consumers, however, a firmer won would be a tailwind, especially if it helps offset persistent energy costs.
With Korea on track to top $1 trillion in annual exports, the core narrative is straightforward: AI-led chip demand is reinforcing the country’s external balance, and that gives the won room to appreciate even if the dollar remains structurally supported by higher U.S. yields. The main question for markets is not whether the won can strengthen, but whether it can do so without being derailed by shifts in global risk sentiment.
| Entity | Gains | Losses |
|---|---|---|
| South Korean exporters | ▲Strong external demand | ▼Currency translation gains |
| Importers and consumers | ▲Cheaper dollar-denominated imports | ▼None if won weakens less |
| Foreign investors in Korea | ▲Better macro backdrop | ▼FX volatility risk |
| U.S. dollar | ▲Higher yield support | ▼Won appreciation pressure |
