Market Participants Watch for Renewed Kospi‑Won Correlation as Recent Decoupling Fades

Foreign investors channelled record sums into leveraged exchange‑traded funds (ETFs) during the first half of the year, causing the historical link between Korean equities and the won to break down. Although the correlation has since normalised, hedge funds remain on high alert for any future outsized moves.

Emerging‑market currencies typically move in step with their domestic equity markets—strengthening during bull markets and weakening during downturns. This long‑standing pattern was essentially reversed during the period under review.

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