The Won-Dollar Exchange Rate Declines... Risk Asset Preference Grows Amid Vaccine Optimism

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] On the morning of the 17th, the won-dollar exchange rate continued its downward trend. Recently, as risk asset preference sentiment has strengthened, the won has been appreciating sharply, and expectations for the development of a novel coronavirus (COVID-19) vaccine have also stimulated risk asset investment sentiment.

As of 10:24 a.m. in the Seoul foreign exchange market, the won-dollar exchange rate is trading at 1,106.94 won, down 2.36 won from the previous day's closing price. The exchange rate started at 1,107.0 won and has been moving around the 1,107 to 1,108 won level.

Recently, in the foreign exchange market, risk asset preference sentiment including the won has been strengthening. Foreign capital also flowed massively into the Korean stock market the day before, causing the exchange rate to fall to the 1,105 won level during the session, but verbal intervention by authorities reduced the decline. In particular, the fact that Asian countries such as Korea are recovering faster from the COVID-19 shock compared to the US or Europe is another reason for the won's strength.

Overnight, new news about COVID-19 vaccine development further increased expectations. Following Pfizer, Moderna also announced results indicating that vaccine development success is imminent, stimulating hopes that the COVID-19 crisis could end next year.

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