The USD/KRW exchange rate, recently trading near 1,520 as of late May 2026 after rising over 1% in a single session, reflects persistent dollar strength driven by elevated U.S. Treasury yields and relatively firmer U.S. growth data compared with South Korea. The Bank of Korea has held its base rate steady at 2.50% since earlier in the year, while the interest-rate differential with the Federal Reserve continues to favor capital outflows from the won, amplifying depreciation pressures alongside broader risk-off sentiment in emerging-market currencies. Korean export competitiveness, particularly in semiconductors, and potential policy interventions remain key variables, though recent forecasts from institutions like Bank of America anticipated greater stabilization or appreciation earlier in the cycle. Traders will monitor upcoming Bank of Korea monetary policy meetings, Federal Reserve communications on rate paths, and releases of U.S. and Korean CPI and GDP figures for shifts in relative policy expectations that could influence the pair’s trajectory through year-end.