South Korea’s Gross Domestic Product (GDP) recorded a quarterly contraction of 0.3% in the fourth quarter. This figure was below the anticipated 0.1% growth forecast.
Elsewhere, the Silver price dropped below $92.00, reflecting decreased safe-haven demand. Meanwhile, the Japanese Yen stabilised against the USD, amid market attention on the Bank of Japan’s upcoming rate decision.
Market Fluctuations
WTI crude settled around $60.50, amidst continuing concerns about oversupply. The NZD/USD strengthened to near 0.5850 due to eased tariff threats.
The Australian Dollar saw an increase, buoyed by employment data that strengthened expectations concerning the Reserve Bank of Australia’s monetary policy.
Major currencies and assets experienced fluctuations, with EUR/USD dropping below 1.1700 amid renewed selling. The GBP/USD traded within a narrow range above 1.3400, with traders monitoring forthcoming US data.
Gold decreased to below $4,800 as US-Europe tariff tensions eased. Broader market movements saw stocks, bonds, and other assets regain traction after recent volatility.
Korean Market Concerns
Monero (XMR) extended its decline below $500 due to persistent selling pressures. The decline represents a 38% drop from a high of $800, recorded last Wednesday.
The unexpected contraction of 0.3% in South Korea’s fourth-quarter 2025 GDP is a significant bearish signal, especially against the forecast of a 0.1% expansion. This negative print confirms a sharp slowdown in a key global trade bellwether. We are now pricing in a higher probability of a technical recession, prompting a re-evaluation of risk across Asian markets.
This directly impacts our view on the Korean won, and we expect further weakness against the US dollar. In late 2025, we already saw South Korea’s exports decline for three consecutive months, driven by a global downturn in semiconductor demand which fell over 15% year-over-year. This trend makes shorting the won, or buying USD/KRW futures, a primary strategy, with a potential move towards 1,450 in the coming weeks.
On the equity side, this suggests shorting the KOSPI 200 index futures. Given the heavy weight of export-oriented tech giants like Samsung and SK Hynix, their earnings will face significant headwinds from both falling demand and a weaker global outlook. Traders should consider buying put options on major Korean ETFs as a way to position for further downside.
This slowdown is not happening in a vacuum and will pressure regional economies. The Bank of Japan, which was already hesitant to tighten policy, will likely use this data as a reason to delay any rate hikes further. We anticipate continued weakness in the Japanese yen as a result, making long USD/JPY positions attractive.
This news is also bearish for industrial commodities, especially crude oil and copper. South Korea’s role as a major manufacturer means its economic contraction signals a drop in global demand for raw materials. Consequently, we see WTI crude oil struggling to hold the $60 per barrel level and view any rallies as opportunities to enter short positions.
