Won-Dollar Exchange Rate Rises to 1346.6 Won Intraday... New High Reached (Comprehensive Report 2)

Closed at a post-financial crisis high of 1,345.5 won

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate closed at 1,345.5 won on the 23rd, marking the highest level since the financial crisis. Despite verbal intervention by foreign exchange authorities after two months to curb the relentless rise in the exchange rate, the rate expanded its gains again in the afternoon, approaching the 1,350 won mark.

According to the Seoul foreign exchange market on the day, the won-dollar exchange rate closed at 1,345.5 won, up 5.7 won from the previous day's closing price. This is the highest level in about 13 years and 4 months since April 28, 2009 (closing price of 1,356.80 won) during the financial crisis.

On the day, the exchange rate showed a steep upward trend, reaching a high of 1,345.2 won around 9:05 a.m. Due to the sharp rise in the exchange rate, the foreign exchange authorities conducted verbal intervention for the first time in about two months in the morning. A foreign exchange official stated, "We will closely examine whether there are speculative factors centered on offshore markets amid the recent rise in the won-dollar exchange rate caused by the global dollar strength." President Yoon Suk-yeol said in a morning Q&A, "I think the public may be worried about the exchange rate soaring to 1,340 won," adding, "We will manage it well so that the public does not feel anxious."

After the intervention by the foreign exchange authorities, the won-dollar exchange rate slightly fell below 1,340 won but expanded its gains again in the afternoon. Just before the market closed, at around 3:29 p.m., it surged to 1,346.6 won.

Experts foresee that the strong dollar phenomenon will continue for the time being, leading to increased volatility in the foreign exchange market. Moon Hong-chul, a researcher at DB Financial Investment, said, "With inflation shocks in the UK and Germany and even the possibility of stagflation in Europe being raised, currencies other than the dollar, such as the euro, are showing simultaneous weakness, making the dollar relatively more favored. Although export companies have dollar selling (negotiation) volumes at the end of the month, the exchange rate is expected to continue attempts to break through 1,350 won for the time being."

Lee Bu-hyung, director at Hyundai Research Institute, said, "At the Jackson Hole meeting scheduled for the 26th (local time), Federal Reserve Chairman Jerome Powell is also expected to express his intention to tighten monetary policy, increasing market caution," adding, "Volatility in the foreign exchange market is expected to continue until the market confirms its direction."

As the exchange rate rises more steeply than expected, the financial investment industry is also adjusting the upper limit of the exchange rate for the second half of the year. The possibility of breaking through the 1,350 won level, which was considered the peak for the second half, is not being ruled out.

Jeon Gyu-yeon, a researcher at Hana Securities, said, "It is difficult for the global strong dollar trend itself to change," and predicted, "In the second half, the dollar will continue a strong and stable trend reflecting the Federal Reserve's policy stance and the difference in economic strength between the U.S. and Europe." Jeon added, "The market is preemptively reflecting U.S. tightening ahead of Jackson Hole, causing the exchange rate to rise. However, the level burden is also increasing, so the first resistance level is 1,350 won, and if this resistance is broken, the possible upper limit will be around 1,365 won."

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