SEOUL (dpa-AFX) - The South Korean won recovered from recent loss against the U.S. dollar in the Asian session on Thursday, following the completion of a trade agreement between Seoul and Washington.
U.S. President Donald Trump declared a new trade agreement with South Korea, which imposes a 15 percent tariff on imports from South Korea. The deal also encompasses a $350 billion commitment from South Korea for investments that are owned and controlled by the US.
Nevertheless, South Korean President Lee Jae Myung stated that the funds are intended to assist Korean companies in their expansion into the US markets.
The Democratic Party, currently in power, expressed approval of the agreement, emphasizing the alleviation of tariff pressures.
In contrast, the opposition party, known as the People Power Party, raised apprehensions regarding the possible economic strain that may arise from the agreement.
Concurrently, business organizations in South Korea conveyed their endorsement of the trade agreement with the United States, pointing out that it would contribute to reducing the uncertainty affecting Korean exports.
Traders remain cautious ahead of the final deadline of August 1 set by the Trump for reaching trade deals with its trading partner countries. Trump hinted at higher tariffs on certain countries after the deadline.
Meanwhile, the U.S. Fed announced its widely expected decision to leave interest rates unchanged in a divided vote. The decision to leave rates unchanged was not unanimous as Fed Governors Michelle Bowman and Christopher Waller preferred to lower rates by a quarter percentage point.
During his post-meeting press conference, Fed Chair Jerome Powell said the central bank has not made a decision about lowering rates in September. 'We don't do that in advance,' Powell said. 'We'll be taking that information into consideration and all the other information we get as we make our decision.'
Traders focus their attention to the U.S. Personal Consumption Expenditures (PCE) Price Index, due later in the day, which is anticipated to show a slight increase.
Against the U.S. dollar, the won rose to 1385.91 from a recent near 2-1/2-month low of 1397.28. At yesterday's close, the won was trading at 1393.52 against the greenback.
If the won extends its uptrend, it is likely to find resistance around the 1320.00 region.
Looking ahead, Eurozone unemployment rate for June is due to be released at 5:00 am ET in the European session.
In the New York session, the German flash CPI data for July, Canada GDP data for June, average weekly earnings data for May, U.S. core PCE price index for June, personal income and spending data for June, employment cost data for the second quarter, weekly jobless claims data and U.S. Chicago PMI data for July are slated for release.
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