South Korea’s won isn't being helped by the chip boom

South Korea’s AI-exposed tech sector is driving a healthy economy, but the currency is near 17-year lows against the US dollar. What’s going on?

The balance of payments helps explain this disconnect. The chip exports driving the trade surplus have not been enough to offset Koreans’ massive investments in foreign securities – especially the US stock market, which is itself being driven by the AI phenomenon.

Investors are pricing in a rate hike from the Bank of Korea, partly to shore up the won at a time when its depreciation is making imported oil even more expensive amid the Middle East crisis.