The Won-Dollar Exchange Rate Surges to 1294.7 Won... New Record High Reached

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] The won-dollar exchange rate surged to 1,294.7 won on the 20th, setting a new high. The strong dollar phenomenon continues amid concerns that economic growth will slow due to interest rate hikes by central banks such as the United States.

On this day, in the Seoul foreign exchange market, the won-dollar exchange rate started at 1,291.0 won, up 3.7 won from the previous trading day, then soared to 1,293.6 won around 9:15 a.m., breaking the previous high, and further surged to 1,294.7 won around 10:40 a.m.

The exchange rate starting in the 1,290 won range is the first time in four trading days since the 14th (1,291.5 won), gaining momentum in the rise, and it has far surpassed the previous high recorded on the 15th (intraday basis 1,293.2 won).

This is interpreted as a result of increased preference for safe-haven assets amid growing concerns that economic growth will slow due to interest rate hikes by major central banks such as those of the United States, the United Kingdom, and Switzerland.

Last week, the U.S. central bank, the Federal Reserve (Fed), raised the benchmark interest rate by 0.75 percentage points, followed by the Bank of England raising it by 0.25 percentage points to 1.25%. The Swiss National Bank decided to raise its benchmark interest rate for the first time in 15 years, continuing the trend of rate hikes.

Additionally, the possibility that the U.S. Fed will take another 'giant step' at next month's Federal Open Market Committee (FOMC) meeting to curb high inflation is increasing, influencing the rise in the exchange rate.

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