Lee Sanghun, head of Korea trading at Citigroup Inc., says the won’s recent weakness may be short-lived as South Korea’s chip sector bolsters growth, supporting the currency’s recovery against the dollar by year-end. He notes a risk the won could fall past 1,400 per dollar in the near term due to external factors like a hawkish Federal Reserve and inflation concerns from higher oil prices. However, he views levels around 1,400 as a good opportunity to sell dollars and buy the won.

After a two-month rally that made it Asia’s top-performing currency, the won declined for a fourth straight session Thursday, touching as low as 1,388.25 per dollar. Lee maintains his year-end target of 1,330 for the won, citing strong domestic fundamentals. He sees scope for the won to strengthen to the upper 1,200s in the first half of 2027 if the semiconductor cycle remains strong and Middle East tensions ease.

Exporters sold dollars too hastily in July and August and are now flush with won liquidity, leaving them with no urgency to sell more.