Won-Dollar Exchange Rate Surpasses 1,390 Won... First Time in 13 Years and 5 Months (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] The won-dollar exchange rate surpassed 1,390 won for the first time in 13 years and 5 months. This was due to the U.S. Consumer Price Index (CPI) inflation rate exceeding market expectations, increasing fears of monetary tightening.

According to the Seoul foreign exchange market on the 14th, the exchange rate, which started at 1,393.0 won, up 19.4 won, surged to 1,394.8 won at 9:01 a.m. shortly after the market opened.

The exchange rate exceeding the 1,390 won level is the first time since March 31, 2009, during the financial crisis (high of 1,422.0 won), which is about 13 years and 5 months ago. Even on a closing basis, it is the highest level since March 20, 2009, when it was 1,412.5 won.

The U.S. CPI inflation rate was 8.3%, lower than July's 8.5%, but it exceeded market expectations of 8.0%, spreading caution about the intensity of tightening. In particular, the possibility of the U.S. Federal Reserve (Fed) implementing a third consecutive 'giant step' (a 0.75 percentage point interest rate hike at once) to respond to inflation has increased, and even a 1 percentage point hike is being discussed.

Moon Hong-chul, a researcher at DB Financial Investment, said, "The U.S. inflation shock has strengthened the view that the Fed will continue aggressive tightening, intensifying the dollar's strength," adding, "Market volatility is expected to increase further until the U.S. Federal Open Market Committee (FOMC) meeting next week, and the year-end upper limit should be kept open up to 1,450 won."

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