Geopolitical Tensions Rise, Exchange Rate Returns to 1320 Won Level

Rebound After Opening at 1,316 Won

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] As geopolitical tensions in Eastern Europe escalate, the KRW-USD exchange rate has risen to the 1,320 won level.

According to the Seoul foreign exchange market on the 16th, the exchange rate opened at 1,316.0 won per dollar, down 1.6 won from the previous day's closing price, but then rebounded and has been fluctuating around the 1,320 won level in the early trading session.

According to foreign media, two missiles presumed to have been launched from Russia fell on the 15th (local time) in Przewod?w, a village near the eastern Ukraine border in Poland, a member country of NATO and the European Union, killing two people.

In response, U.S. President Joe Biden held an emergency meeting on the 16th (local time) in Bali with leaders of major countries including the United Kingdom, Germany, France, Canada, the Netherlands, Japan, Spain, and Italy to discuss countermeasures. Currently, President Biden and the leaders of major countries are staying in Bali, Indonesia, to attend the G20 summit.

The White House has pledged full support for the Polish government's investigation into the missile strike, and Poland is currently strengthening its military readiness and considering requesting an emergency NATO consultation.

Kim Seung-hyuk, a researcher at NH Futures, said, "The October U.S. Consumer Price Index (CPI) came in lower than market expectations, followed by the October Producer Price Index (PPI) announced on the 15th (local time), which also fell short of market forecasts, raising expectations that inflation has peaked, which is a favorable factor for a decline in the exchange rate. However, a strong response scenario to the Poland incident and inflows of settlement demand are factors supporting the downside."

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