Won hits near two-year high as exporter dollar sales, thin bids offset foreign selling amid 3.65% KOSPI drop

The textbook channel points the other way. A foreign investor who sells Korean shares converts the proceeds into dollars, and that demand can weaken the won ^[22]. Korea's exports averaged a record $4.75 billion a day in the first ten days of October ^[7], roughly 3.2 times the $1.5 billion of net foreign stock selling on Oct. 12 ^[2][8]. The comparison is crude: shipments are gross, and the reports do not say how much of the receipts exporters sold.

The futures leg is the less certain one. Speaking of the increase in foreign selling of currency futures, one foreign exchange market participant said: "We cannot know for certain, but most views attribute it to reduced currency hedging as local share prices fall and to forecasts that the won will strengthen on the back of a current account surplus." ^[21] That names two motives for the same order, trimming cover or betting on the won, without ranking them.

The dealer describes exporter selling as ordinary in size. "There was no unusually large volume of exporter conversions, but bids were weak, so the won moved quickly," a currency dealer at a commercial bank said ^[17]. Yonhap's traders name the exporters as the cause ^[15]; the dealer does not dispute that they sold, only the size.

The reports also disagree on the day's high. Seoul Economic Daily has 1,333.20 in early trading ^[13]. With the prior close at 1,342.8 ^[9], that is a 9.6 won move ^[18], and the close kept 7.7 of it, or 80% ^[10], after bargain hunting pared the gain ^[5]. Yonhap has an afternoon high of 1,331.3 ^[14]. That matches to the decimal the 1,331.30 Seoul Economic Daily gives for Oct. 4, 2024 ^[13], and the 1,335.1 close is 3.8 won weaker than that mark ^[19].

We think exporters and futures sellers supplied the dollars, and a thin book let an ordinary amount of selling move the rate 7.7 won ^[1]. The counter-case is that exports this large make even ordinary conversions big, and a thin book then magnifies them, so the two explanations collapse into one. A third possibility is that the hedge trimming accounted for most of the move and the exporters for little of it. If the won gives back the day's move once U.S. and Japanese markets reopen, the print was thin trading, and a close above 1,342.8 would erase it entirely ^[9]. If it holds near 1,335 through more foreign selling, we are wrong about the size, and the flow is larger than the dealer says.