Exchange Rate Surges Near 1170 Won... Foreigners Focused on Selling Samsung Electronics and SK Hynix (Update)

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eun-byeol] The won-dollar exchange rate has soared, surpassing 1165 won and is now eyeing 1170 won. The exchange rate surged as foreign investors sold off Samsung Electronics and SK Hynix stocks. Considering that the value of the dollar is rising due to the imminent tapering (asset purchase reduction) by the U.S. Federal Reserve (Fed), and that the won is relatively weak as domestic COVID-19 cases have not subsided, the exchange rate is expected to continue rising for the time being.

On the 13th, the won-dollar exchange rate opened at 1163.5 won, up 2.3 won from the previous day, in the Seoul foreign exchange market. As of 10:11 a.m., the won-dollar exchange rate is trading at 1167.92 won in the Seoul foreign exchange market. This is the highest level since September 29 last year (1171.20 won) based on intraday exchange rates. The won-dollar exchange rate has jumped nearly 25 won this week alone compared to the closing price on the 6th (1142.10 won).

As the timing of the Fed's tapering approaches and the COVID-19 Delta variant spreads globally, a preference for safe assets including the dollar has emerged, causing the dollar to start strengthening.

Meanwhile, as analysis suggests that the semiconductor cycle is entering a downturn phase, foreign investors have been heavily selling Samsung Electronics and SK Hynix stocks. As foreign investors sell domestic stocks and convert them into dollars, the won-dollar exchange rate surged.

On this day, Samsung Electronics traded at 75,000 won on the Korea Exchange, down 2.60% from the previous day, marking the fourth consecutive day of decline. During the session, it fell as much as 2.86% to 74,800 won, recording the lowest price of the year. SK Hynix traded at 100,000 won, down 0.50% from the previous day, showing weakness for the seventh consecutive trading day.

Earlier, global investment bank (IB) Morgan Stanley released a report titled "The Winter of Semiconductors is Coming," lowering Samsung Electronics' target price from 98,000 won to 89,000 won, and drastically cutting SK Hynix's target price from 156,000 won to 80,000 won.

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