The immediate trigger was a run of US data below market forecasts. Retail sales, consumer prices and producer prices each came in softer than expected, weakening expectations of a September move by the Federal Reserve and pulling the dollar index lower.

Domestically, exporter conversion flows are cited. With semiconductor shipments still strong, steady demand to convert dollars into won has reached the market. Participants say the near-160-won fall over the past six weeks is bound up with the same flow.

The speed of the decline is flagged separately. The KOSPI triggered a sell-side sidecar the same day, the twenty-fifth this year. With Middle East tensions and an equity correction overlapping, some caution that the rate could revisit the region of 1,400.

A lower rate feeds into import prices with a lag. Industries bringing in raw materials and components see costs ease, while exporters find won-denominated earnings pushed the other way. Remittances tied to travel and study abroad also move with the level.

For ethnic Chinese business owners in Korea, the exchange rate arrives as a question of settlement currency rather than a single number. In transactions that use the yuan, the New Taiwan dollar and the US dollar together, business people in Incheon and Seoul say the width of the swings matters more than the direction.

Forecasts in the market run both ways: room to fall toward around 1,380 on flows, or a reopening of the upper band if volatility widens.