Won-Dollar Exchange Rate Falls to Around 1360 Won... Sharp Decline for Three Consecutive Days

On the morning of the 9th, the KOSPI index and exchange rates were displayed on the electronic board in the dealing room of Hana Bank in Jung-gu, Seoul. [Image source=Yonhap News]

The won-dollar exchange rate has fallen sharply for three consecutive days, dropping to the 1,360 won level per dollar.

On the 9th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,364.8 won, down 20.1 won from the previous trading day's closing price.

This is the first time in about two months since September 2 that the won-dollar exchange rate has recorded the 1,360 won level based on the closing price.

On that day, the won-dollar exchange rate opened at 1,376.0 won per dollar, down 8.9 won from the previous day's closing price, and continued to decline.

The exchange rate has fallen by 18.0 won on the 7th, 16.3 won on the 8th, and more than 20 won on this day, marking a sharp decline for three consecutive days.

The possibility of the Republican Party controlling both the House and Senate in the U.S. midterm elections has weakened expectations for interest rate hikes, leading to a decline in the dollar.

If the Republican Party wins the election, it could put a brake on the Democratic Party's fiscal spending, causing an economic downturn and potentially easing the Federal Reserve's tightening policy.

Additionally, expectations that Chinese authorities will ease the 'zero-COVID' lockdown policy are also contributing to the downward trend in the won-dollar exchange rate.

However, some analysts say it is premature to conclude that the won-dollar exchange rate has entered a sustained downward trend.

This is because the Fed's pivot (policy shift) has not yet been confirmed, and Chinese authorities have so far denied easing COVID-19 restrictions. Factors weakening the won, such as deteriorating domestic exports and tightening bond market liquidity, are also ongoing.

Hwang Se-woon, a senior researcher at the Korea Capital Market Institute, explained, "Since the U.S. base interest rate is likely to rise faster than ours for the time being, it is more appropriate to view this as a temporary technical decline," adding, "The possibility of the exchange rate surpassing 1,400 won again in the future remains open."

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