Drone attack on Oman rattles Asian FX, South Korean won hits 17-year low
A drone attack on Oman escalated geopolitical tensions in the Middle East, driving risk-off flows that pushed the South Korean won to its weakest level since March 2009 and weighed on Asian currencies broadly.
Asian currencies ended the week under broad selling pressure after a drone attack on Oman heightened geopolitical risk in the Middle East, compounding existing risk-off sentiment. The South Korean won bore the brunt of the selloff, sliding to its weakest level since March 2009, while the KOSPI index fell more than 6% at one point before paring losses.
The drone strike on Oman added a fresh layer of uncertainty to an already cautious market environment. For currency traders, the immediate reaction was a flight to safe-haven assets, with the US dollar and Japanese yen strengthening against most Asian peers. The won's sharp decline was amplified by domestic factors: a suggestion from South Korea's Labour Minister that companies like Samsung should share excess profits from the AI boom rattled investor confidence in Korean equities, triggering capital outflows. This combination of external geopolitical shock and domestic political noise created a perfect storm for the won, which has now erased years of gains. Traders tracking real-time FX quotes on NowPrice can monitor the won's next moves against the dollar as the situation evolves.
Looking ahead, markets will focus on any further escalation in the Middle East and its impact on oil prices, which could add to inflationary pressures and complicate central bank policy across Asia. South Korea's finance ministry may step in with verbal intervention or actual dollar-selling to stem the won's slide, but the effectiveness of such measures remains uncertain given the strength of the risk-off wave. Key data releases next week, including US jobs figures, will also shape the dollar's broader trajectory and determine whether Asian currencies can stabilize.