The South Korean won was on a tight rope flirting with the psychologically important 1,400 against the US dollar on Thursday, and its further slide seemed all but guaranteed following Donald Trump's presidential victory, experts said.

The won was trading at 1,403.80 to the greenback as of 9:30 a.m., down 7.6 won from the previous session's close, moving in tandem with other Asian currencies after Trump won the US presidential vote.

On Wednesday, the local currency fell to the lowest in two years amid increased bets on Trump's victory in the US presidential election.

Trump has been preaching for a sweeping policy shift by levying at least 10 percent tariffs on all imported goods, and his return to the Oval Office also portends drastic protectionism and an increase in budget deficit.

Should his policies be implemented, inflationary pressures in the world's largest economy will grow, which would limit the Federal Reserve's rate-cut pace down the road.

"In a nutshell, Trump policies would work to boost inflation, and the Fed may be cautious in cutting the rates, and the US dollar will further gain," said Lee Nak-won, a currency trader at NH Nonghyup Bank.

The Fed is currently expected to cut its benchmark interest rate by a quarter percentage point to the 4.5 to 4.75 percent range at this week's policy meeting after lowering the rate by half of a percentage point in September, the first cut in 4 1/2 years.

Market experts said the won would face ups and downs and possibly slide to the 1,450 level this year.

In that case, the Bank of Korea will be also forced to delay its rate cut steps as the currency movements have emerged as one of the key factors for its rate decision amid moderating inflation and weak growth.

Last month, the BOK lowered its benchmark interest rate by a quarter percentage point to 3.25 percent to end its tightening cycle that began in August 2021.

The BOK had delivered rate hikes through January 2023 and kept the rate at 3.5 percent, the highest level in about 16 years.

Given eased inflation and weaker-than-expected economic expansion, the BOK has been expected to speed up its rate cut march.

But the weakness of the Korean won may spur foreign investors to pull out of the Korean market, which adds more downward pressure on the local currency, and make imported goods more expensive, adding to inflation in Asia's fourth-largest economy.

The BOK is scheduled to hold its rate-setting meeting later this month. (Yonhap)