Won-Dollar Exchange Rate Plummets to '1380 Won Range'... Expectations Rise for US Midterm Elections and China’s Easing of Quarantine Measures

1380 Won Range After a Month and a Half Since September 21
Two Consecutive Days of Sharp Decline... Increased Risk Appetite Due to US Midterm Elections
Expectations for China's Shift from 'Zero-Corona' Policy

On the morning of the 8th, the won/dollar exchange rate fell below 1,400 won in the Seoul foreign exchange market, and the exchange rate was displayed on the screen in the dealing room of Hana Bank in Jung-gu, Seoul.
[Image source=Yonhap News]

The won-dollar exchange rate has fallen to the 1,380 won level for the first time in a month and a half. This is the result of expectations surrounding the U.S. midterm elections and China's shift in its 'zero-COVID' policy, drawing attention to whether the won-dollar exchange rate can stabilize at the 1,380 won level.

On the 8th, in the Seoul foreign exchange market, the won-dollar exchange rate started at 1,394.0 won, down 7.2 won from the previous day's closing price, maintaining a downward trend. During the day, the exchange rate fluctuated around the 1,387 won level, marking the first time since September 21 that the won-dollar exchange rate recorded the 1,380 won level against the dollar.

The exchange rate had also closed the previous day at 1,401.2 won, down 18 won, lowering the bottom. With two consecutive days of decline, analysis in the foreign exchange market suggests that the rate could stabilize at the 1,380 won level per dollar.

The decline in the won-dollar exchange rate, which had been soaring past 1,400 won since September, is interpreted as a result of the global dollar strength easing ahead of the U.S. midterm election results. The market views the scenario that the U.S. Republican Party will secure a majority in both the House and Senate as a positive signal.

Additionally, expectations that Chinese authorities may ease zero-COVID lockdown measures are also acting as a factor strengthening the won's value. Earlier, the Wall Street Journal (WSJ) reported that the Chinese leadership is considering measures to move away from the zero-COVID policy aimed at blocking COVID-19 and toward reopening (resuming economic activities). As a result, foreign investors' buying momentum in the domestic stock market has continued, boosting the won's value.

Kim Seung-hyuk, a researcher at NH Futures, explained, "The won-dollar exchange rate is expected to attempt stabilization in the 1,390 won range due to the U.S. midterm election results and the recovery of risk appetite. However, caution remains regarding the U.S. Consumer Price Index (CPI) announcement, so support at the lower end is also expected."

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