The US dollar strengthened and foreign investors sold off South Korean stocks, causing the South Korean won to fall to its lowest point since 2009.

As the dollar strengthens and overseas investors sell off South Korean stocks, the Korean won has fallen to its lowest level since the global financial crisis, leading the decline of Asian currencies. The Korean won exchange rate fell by 0.6% to 1559.10 won per US dollar, reaching its lowest level since March 2009 when it dropped to 1562.20. On Wednesday, overseas investors sold a net value of 1.46 trillion won (approximately $9.38 billion) of the Korea Composite Stock Price Index (KOSPI) stocks, marking the eighth consecutive day of fund outflows. "The weakening of the won as the dollar strengthens is not surprising," said Moon Dawoon, economist at Korea Investment & Securities Co. "If the won really falls to a new low, the next technical level will be difficult to determine. Qualitatively, the downside room for the won against the dollar should remain around 1600." Last month, Bank of Korea Governor Shun Hyun-sung stated that the weakening of the won due to large-scale selling by foreign investors is expected to raise import prices, exacerbating inflationary pressures. He said, "Given the current economic growth, inflation, and financial stability situation, the direction of monetary policy is relatively clear." The Bank of Korea will hold its next monetary policy meeting on July 16. Economists expect the Bank of Korea to start raising interest rates. On Wednesday, the South Korean KOSPI index fell by 3.9%, with chip giants Samsung Electronics and SK Hynix both dropping by over 3%. The significant outflow of foreign funds on Wednesday is a continuation of the selling spree seen in the previous quarter. In the last quarter, foreign investors sold a record $58 billion worth of South Korean stocks, mainly because global funds have reached their limit on holding Samsung and SK Hynix stocks, and the market sentiment in the artificial intelligence (AI) sector is changing. Notably, driven by demand for AI storage chips, the South Korean KOSPI index has risen by 100% in the first half of this year, leading major stock indexes globally, with the two heavyweight stocks Samsung Electronics and SK Hynix rising by around 180% and 310%, respectively. The prosperity of the semiconductor industry is expected to continue, as data from the Korean Customs Office on Wednesday showed that chip shipments in June grew by 199.5% year-on-year, reaching a record $44.8 billion. On Wednesday, the Indonesian rupiah, Philippine peso, and Thai baht also experienced declines. The Japanese yen exchange rate against the dollar fell by 0.1% to 162.70, breaking below the 162 level earlier in the week, hitting its lowest level since 1986. The Bloomberg Dollar Spot Index rose by 0.2%.