Due to US CPI caution, exchange rate closes at 1,430 won... Treasury bond yields rise across the board

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate closed above 1,430 won amid caution ahead of the U.S. Consumer Price Index (CPI) announcement.

According to the Seoul foreign exchange market on the 13th, the won-dollar exchange rate closed at 1,431.3 won, up 6.4 won from the previous day's closing price.

The exchange rate opened at 1,424.5 won, down 0.4 won from the previous day, but increased its rise in the afternoon, reaching 1,431.4 won just before the market closed.

In the market, risk aversion grew ahead of the U.S. CPI announcement. Although the September U.S. CPI is expected to rise 8.1% year-on-year, down from 8.3% in the previous month, caution is increasing as the level remains high.

According to the minutes of the September Federal Open Market Committee (FOMC) regular meeting released by the U.S. Federal Reserve (Fed) the day before, many participants emphasized that "the cost of acting too little to reduce inflation is greater than the cost of acting too much."

As inflation remains unchecked, there is a possibility that the Fed will raise the benchmark interest rate by 0.75 percentage points again next month.

◆Reversing the previous day's interest rate decline= On this day, Treasury bond yields rose across the board (bond prices fell). In the Seoul bond market, the 3-year Treasury bond yield closed at 4.203% per annum, up 0.096 percentage points from the previous trading day.

The 5-year Treasury bond closed at 4.221% per annum, up 0.103 percentage points. The 10-year Treasury bond closed at 4.239%, up 0.129 percentage points.

The 20-year Treasury bond closed at 4.127%, up 0.089 percentage points. The 30-year Treasury bond yield rose 0.062 percentage points to 4.002%, and the 50-year Treasury bond yield rose 0.058 percentage points to 3.928%.

A bond market official said, "The sharp decline in yields caused by two members of the Bank of Korea Monetary Policy Committee expressing a minority opinion for a '0.25 percentage point hike' at the previous day's meeting was largely reversed today," adding, "This was due to growing caution ahead of the U.S. CPI announcement."

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