Won-Dollar Exchange Rate Surpasses 1300 Won Again... Highest in 13 Years

Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), is holding a press conference after concluding the Federal Open Market Committee (FOMC) regular meeting at the Fed headquarters in Washington, DC on the 15th (local time). [Image source=Yonhap News]

The won-dollar exchange rate surpassed 1,300 won again after four trading days, reaching a new high.

On the 30th, in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1,300.5 won, up 1.5 won from the previous trading day (1,283.4 won).

In the early session, the exchange rate rose to 1,303.7 won, surpassing the previous high of 1,302.8 won recorded on the 23rd. This level is also higher than the intraday high of 1,303.0 won recorded on July 14, 2009, marking the highest level in about 13 years.

This is interpreted as a result of the accelerated tightening by the U.S. Federal Reserve (Fed) and increased global economic uncertainty, which strengthened the preference for the safe-haven dollar.

Fed Chair Jerome Powell said on the 29th (local time) at the European Central Bank (ECB) forum held in Portugal, "There is a risk that the Fed may tighten excessively, but a bigger mistake would be failing to stabilize prices."

This means that some economic slowdown risks through interest rate hikes must be accepted to combat the worst inflation. On the 15th (local time), the Fed implemented a 'giant step' by raising the benchmark interest rate by 0.75 percentage points, and it is highly likely to continue raising rates by 0.50 percentage points or more going forward.

In this situation, the final GDP growth rate for the U.S. first quarter was announced at -1.6% (annualized), showing a worse performance than the preliminary figure of -1.5%. The three major indices of the New York stock market showed mixed trends amid Powell's remarks and disappointing economic data releases.

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