Strong GDP data strengthens South Korean won, Commerzbank reports

South Korea’s advance estimate for second-quarter GDP came in at 0.6% quarter-on-quarter and 3.7% year-on-year, surpassing consensus expectations. The upside surprise was driven by solid AI-related semiconductor exports and steady domestic consumption.

Commerzbank notes that the better-than-expected growth print reinforces the case for an additional 25 basis point rate hike by the Bank of Korea. The central bank has been navigating inflation pressures without derailing the economic recovery.

The strong data, combined with capital inflows, are providing support for the Korean won. The currency has benefited from the improving macro backdrop and hawkish central bank tilt.