South Korean Won plunges to fresh 2-year lows vs the US Dollar

• South Korean President  Yoon Suk Yeol declared martial law.
• The SK Parliament passed a resolution to lift the martial law.
• USD/SKW hit a two-year high before retracing, remains biased higher

Political tensions hit the South Korean Won

The South Korean Won (SKW) fell against the US Dollar (USD), resulting in the USD/SKW pair hitting a two-year high of 1,444.93. The pair now retreated towards 1,420 but holds on to sharp intraday gains, providing an unexpected boost to the American currency during American trading hours, amid fresh risk-aversion.

“I declare martial law to protect the free Republic of Korea from the threat of North Korean communist forces, to eradicate the despicable pro-North Korean anti-state forces that are plundering the freedom and happiness of our people, and to protect the free constitutional order,” Yoon said, according to a Reuters.

Mounting political turmoil hit the SKW as President Yoon Suk Yeol declared martial law. The late retracement came after the local Parliament passed a resolution to demand the lifting of martial law.  Nevertheless, the latest news from the country showed the army closed the Parliament and was clearing lawmakers out of the representatives’ building.

USD/KRW Technical outlook

The USD/KWR pair remains quite volatile, and given the ongoing political uncertainty, the risk skews to the upside. The pair posted a record high of 1,472.46 in October 2022, a potential bullish target and break-out point. Additional gains should see the pair testing the 1,500 threshold.

Should tensions cool down, near-term support lies at 1,419.36, the intraday low, followed by 1,403.68, the December 2 daily high.