Won-Dollar Exchange Rate Ends Higher for 2 Consecutive Trading Days Amid US CPI Concerns

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jung] Ahead of the release of the US December Consumer Price Index (CPI), the KRW-USD exchange rate closed higher.

According to the Seoul foreign exchange market on the 11th, the KRW-USD exchange rate closed at 1,246.2 won, up 1.5 won from the previous trading day's closing price. This marks the second consecutive day of increase.

The exchange rate started at 1,241.5 won, down 3.2 won from the previous day, and initially fell to 1,239.6 won in early trading, but then reversed to an upward trend due to offshore buying inflows during the session. Around 10:40 a.m., the rate rose to 1,250 won, then fluctuated around the 1,240 won level.

With the US CPI announcement approaching, Federal Reserve (Fed) officials have mentioned that expectations for interest rate cuts this year are premature, exerting upward pressure on the dollar. However, some are betting on a weaker dollar, noting that the Services Purchasing Managers' Index (PMI) fell below the baseline of 50, indicating limited room for service price increases.

According to The Wall Street Journal (WSJ), economists expect the December CPI to have risen 6.6% year-on-year, slowing from 7.1% in the previous month.

Kim Seung-hyuk, a researcher at NH Futures, said, "As we await the US CPI release, the exchange rate is showing a mixed trend centered around 1,240 won, with upward and downward factors evenly balanced." Oh Chang-seop, a researcher at Hyundai Motor Securities, said, "Due to the recent sharp short-term decline in the exchange rate, further drops are limited. With the Monetary Policy Committee meeting to decide the base interest rate approaching, the exchange rate will likely battle around the 1,250 won level for the time being, but a downward trend is expected to continue."

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