USD-KRW Exchange Rate at 1240 Won... Impact of 'Hong Kong National Security Law' on US-China Conflict (Update)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The won-dollar exchange rate, which had fallen to the 1,220 won level amid expectations for the development of a novel coronavirus (COVID-19) vaccine, is rapidly rising again, surpassing the 1,240 won level.

On the 25th, in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1,240.5 won, up 3.5 won from the previous trading day. As of 10:57 a.m., it is trading at 1,241.62 won, showing an upward trend.

The rise is attributed to risk-averse sentiment in the market amid escalating tensions between the United States and China. The conflict between the U.S. and China, reignited over the responsibility for the spread of COVID-19, is reaching its peak ahead of China's enactment of the 'Hong Kong National Security Law.'

On the 22nd, China unveiled a draft of the Hong Kong National Security Law at the National People's Congress (NPC). The U.S. has warned that it will impose sanctions if China enacts the law. As U.S.-China tensions escalate, the exchange rate is expected to continue its upward trend.

Min Kyung-won, a researcher at Woori Bank, explained, "China chose to push forward with the enactment of the Hong Kong National Security Law, and the U.S. has left open the possibility of economic sanctions, heightening concerns over the dispute. As confirmed during last year's trade dispute, the won tends to face increased depreciation pressure when U.S.-China tensions rise."

This content was produced with the assistance of AI translation services.