South Korea’s transition to 24-hour currency trading for the won is set to enhance market accessibility, attract global investors, and strengthen the won, amid growing international appetite for Korean assets.
The launch of 24-hour won trading increases FX market accessibility for global investors, boosting demand for the won and likely strengthening it against the dollar. Extended hours reduce time-zone barriers, attracting more foreign capital into Korean assets, which supports the won.
It likely strengthens the won against the dollar as more foreign investors access Korean markets without time-zone constraints, increasing demand for the currency.
The won is expected to appreciate as the extended trading hours attract inflows, but global risk sentiment and US dollar dynamics remain key factors.
Higher liquidity generally reduces volatility and transaction costs, making the won more attractive for carry trades and reducing abrupt price swings.
Greater global accessibility to Korean markets, driven by 24-hour won trading, is likely to increase foreign investment in Korean equities, lifting the KOSPI index. The structural change reduces operational friction for international investors, encouraging capital flows into South Korea's stock market.
Extended FX trading hours remove a barrier for foreign investors, making it easier to convert currencies and invest in Korean stocks, potentially increasing equity inflows.
Foreign investors hold a significant share of KOSPI stocks, so improved FX access directly supports further equity investment.
If the won strengthens too rapidly, it could hurt export-heavy companies' profitability, but overall, the ease of trading is positive.
The iShares MSCI South Korea ETF (EWY) directly benefits from increased foreign access to Korean equities as 24-hour won trading facilitates smoother transactions. Rising global appetite for South Korean assets is likely to boost ETF inflows.
Yes, EWY's underlying assets are in won, so a stronger won increases the fund's USD value, amplifying returns for US investors.
Indirectly, as easier currency conversion can attract more capital into Korean stocks, boosting the ETF's inflows and performance.
The launch of 24-hour won trading is set to deepen FX liquidity and attract foreign participation, boosting the Korean won against the dollar. The extended trading hours align South Korea with major global FX hubs, reducing friction for international investors and potentially increasing capital inflows into Korean equities and bonds. This structural shift comes as global demand for exposure to Korea’s tech-heavy economy has been rising.
It allows the Korean won to be traded continuously, aligning with global FX hubs and making it easier for international investors to trade without time-zone constraints, potentially boosting liquidity and foreign inflows.
Korea’s strong export sector, particularly in technology, and its status as a leading emerging market have attracted global investors. The extended trading hours remove barriers, further accelerating this trend.
Increased demand and liquidity could lead to won appreciation as more foreign capital enters Korean markets, though the effect also depends on broader economic conditions and risk sentiment.