Asia FX: Won Leads Gains as Korea Announces FX Reforms; Regional Currencies Mixed

VG Markets · 2026-07-20T09:30:42Z
Asia FX: Won Leads Gains as Korea Announces FX Reforms; Regional Currencies Mixed

Asian currencies traded in relatively narrow ranges on Monday as the U.S. dollar paused after a three-day rally. The U.S. Dollar Index was little changed at 100.76 following softer U.S. inflation data that contributed to lower Treasury yields, while Brent crude remained near $90 per barrel amid continued geopolitical tensions in the Middle East.

South Korean won outperforms

The South Korean won was the region's strongest performer, with USD/KRW falling 0.5% to 1,479.98 after the government announced new foreign exchange market reforms.

Beginning in January 2027, overseas investors will be able to trade the won through pre-registered foreign institutions without opening domestic accounts, with transactions settled through a new 24-hour Bank of Korea settlement network. The measures build on the launch of extended won trading hours earlier this month.

Regional currencies

Several Southeast Asian currencies weakened against the U.S. dollar amid market concerns that sustained higher oil prices could increase inflationary pressures and affect external balances in energy-importing economies.

  1. USD/IDR rose 0.5%
  2. USD/INR gained 0.4%
  3. USD/MYR advanced 0.3%
  4. USD/THB increased 0.3%
  5. USD/PHP added 0.2%

Elsewhere, USD/CNY declined to 6.7721 after China kept its benchmark lending rates unchanged for a 14th consecutive month following the release of second-quarter GDP data.

USD/JPY was little changed at 162.41, with Japanese financial markets closed for a public holiday. IG market analyst Tony Sycamore said the yen's limited reaction to weaker Japanese equities had prompted renewed discussion about its traditional safe-haven role. He added that USD/JPY could move toward 166.50 under his market outlook.

Key events this week

  1. Wednesday: Bank Indonesia interest rate decision. Citi expects the benchmark rate to remain at 5.75%.
  2. This week: South Korea's second-quarter GDP data and Singapore inflation figures.
  3. Thursday: European Central Bank policy meeting.
  4. July 29: Federal Reserve policy decision. According to interest rate futures pricing, markets currently expect the Fed to leave rates unchanged. Cleveland Fed President Beth Hammack said in public remarks on Friday that additional policy tightening could still be considered if inflation remains persistent.