South Korea's local currency has dropped by five percent in one month and may further decline amid a trade war between the United States and China.

According to the Bank of Korea on Sunday, the Korean won closed at one-thousand-214-point-90 won against the greenback on Wednesday, down five percent from one-thousand-154-point-70 won a month earlier.

The value of the Korean won dropped by the third-fastest rate among the currencies of the ten largest developing countries, including China, India, Russia and Argentina, over the past month.

The won's sharp decline was largely attributed to the intensifying trade tension between the world's two largest economies and Japan's trade restrictions.

Some analysts are forecasting that the won may further decline to one-thousand-250 won against the dollar next year.