Korean won edges higher as Fed's Warsh signals moderating inflation expectations

The South Korean won strengthened against the U.S. dollar on Thursday, reversing a recent trend of weakness that had weighed on the currency.

The move followed remarks by Federal Reserve Chair Kevin Warsh, who indicated that inflation expectations have moderated, signaling a potential shift in the trajectory of U.S. monetary policy.

The won opened at 1,522.3 per dollar, marking a slight appreciation from previous session levels.

This development comes after the currency weakened on Tuesday, as traders recalibrated their views on U.S. interest rates and increasingly priced in the possibility of a Federal Reserve rate hike.

Warsh’s comments provided a counterweight to those hawkish expectations, suggesting that the central bank may have more flexibility than previously assumed.

The shift in tone from the Fed chair highlights the sensitivity of Asian currencies to U.S. policy signals.