Korean Won Faces Further Decline Following Trump’s Presidential Win.

Seoul: The South Korean won is precariously hovering near the significant 1,400 mark against the U.S. dollar as of Thursday, with expectations of further depreciation looming after former President Donald Trump's election victory, according to experts. The currency was trading at 1,396.6 to the dollar at 3:30 p.m., a decline of 0.4 won from the previous session, reflecting a trend seen among other Asian currencies following Trump's U.S. presidential win.According to Yonhap News Agency, the local currency reached a two-year low on Wednesday amidst increased speculation over Trump's election success. Trump's proposed economic policies, including significant tariffs on imports and increased protectionism, are expected to drive inflation in the U.S., potentially slowing the Federal Reserve's rate-cutting trajectory. This scenario could further strengthen the U.S. dollar.Market analysts, including Lee Nak-won from NH Nonghyup Bank, suggest that Trump's policies could result in heightened inflation, prompting c aution from the Federal Reserve regarding rate cuts, thereby bolstering the U.S. dollar. The Federal Reserve is anticipated to reduce its benchmark interest rate to between 4.5 and 4.75 percent at its upcoming policy meeting, following a prior reduction in September.Experts predict that the won could fluctuate and possibly fall to around the 1,450 level within the year. Such a decline might compel the Bank of Korea (BOK) to postpone its rate-cutting measures, as currency fluctuations become a significant factor in rate decisions amidst moderate inflation and sluggish growth. The BOK recently reduced its interest rate to 3.25 percent, ending a tightening cycle that began in 2021, but the ongoing weakness of the won may deter foreign investment and exacerbate inflation in South Korea. The BOK's next rate-setting meeting is scheduled for later this month.