South Korean Won Strengthens as Leveraged ETF Curbs Boost Tightening Bets
USD/KRW has dropped to its lowest since February after South Korean regulators moved to tighten rules on leveraged ETFs, according to Commerzbank Research.
The South Korean won firmed against the U.S. dollar, with USD/KRW falling to its weakest level since February. The move came as authorities announced tighter regulations on leveraged exchange-traded funds (ETFs) aimed at cooling the Kospi equity market.
Commerzbank Research noted that the regulatory step fueled expectations of broader policy tightening, lending support to the won. The measures are seen as part of efforts to curb speculative excess and stabilize the local financial system.
The decline in USD/KRW reflects growing market conviction that the Bank of Korea may maintain a relatively hawkish stance, contrasting with a more uncertain outlook for the Federal Reserve.
Source: FXStreet Forex News