Won-Dollar Exchange Rate Drops Nearly 7 Won Ahead of FOMC Meeting

Revived Risk Asset Appetite

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] On the 16th, the won-dollar exchange rate fell nearly 7 won as risk asset preference sentiment revived.

On that day, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,129.7 won per dollar, down 6.6 won from the previous day's closing price.

The exchange rate opened at 1,132.8 won, down 3.5 won, then narrowed its decline during the day, trading in the 1,135 won range for a time in the morning, but the decline widened in the afternoon.

With the U.S. Federal Open Market Committee (FOMC) meeting approaching, U.S. Treasury yields fell and risk asset preference sentiment, including emerging market currencies, revived, putting downward pressure on the exchange rate. The market is showing expectations that the FOMC may present policies to curb the recent rise in market interest rates. Representative measures include YCC (Yield Curve Control), OT (Operation Twist - selling short-term bonds and buying long-term bonds), and extension of SLR (Supplementary Leverage Ratio) regulation easing.

As risk asset preference sentiment revived, the KOSPI index closed up 0.70% that day.

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