Won-Dollar Exchange Rate Surges to 1285.5 Won... US FOMC Caution (Update)

On the 13th, as the KOSPI index started in a downward trend and hit a new intraday low, dealers were working in the Hana Bank dealing room in Euljiro, Seoul. On that day, the KOSPI opened at 2,550.21, down 45.66 points (1.76%). The won-dollar exchange rate started at 1,280.0 won, up 11.1 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate has surpassed the 1,280 won mark again after about a month.

At 9:01 a.m. on the 13th in the Seoul foreign exchange market, the won-dollar exchange rate surged to 1,285.5 won due to the U.S. inflation shock, far exceeding the 1,280 won level. The last time the won-dollar exchange rate exceeded 1,280 won during trading hours was about a month ago, on the 17th of last month.

This is attributed to concerns over strong tightening by the Federal Reserve (Fed) as the U.S. Consumer Price Index (CPI) for May rose 8.6%, the highest in 41 years.

Following the Fed's announcement of a 'big step' of raising interest rates by 0.50 percentage points at once in June and July after May, the possibility of a 'giant step' (a 0.75 percentage point hike) has emerged ahead of the Federal Open Market Committee (FOMC) regular meeting scheduled for June 14-15, spreading market anxiety.

As market risk aversion increased, all major indices on the New York Stock Exchange closed sharply down, and the KOSPI also hit a new yearly low that morning. There is also speculation that if the KOSPI's decline widens during trading hours, the won-dollar exchange rate could approach the yearly high level. The yearly high was 1,288.6 won (closing price) recorded on May 12.

Oh Chang-seop, a researcher at Hyundai Motor Securities, said, "As the strong dollar phenomenon continues, the won-dollar exchange rate may exceed the 1,290 won level," adding, "It seems that concerns over the Fed's FOMC played a significant role, and the foreign exchange authorities are expected to intervene through fine-tuning or verbal intervention to block the 1,300 won level in the future."

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