The Won-Dollar Exchange Rate Closed at 1,304.8 Won... "Box Range Movement Expected for the Next Two Weeks"

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate rose by more than 7 won, surpassing 1300 won again in just one day.

According to the Seoul foreign exchange market on the 24th, the won-dollar exchange rate closed at 1304.8 won, up 7.7 won from the previous trading day. The rate opened at 1297.5 won, up 0.4 won, and continued to rise, reaching as high as 1305.2 won just before the market closed.

The exchange rate breaking through 1300 won again during the day was influenced by the weakness of the yuan and yen. Kazuo Ueda, the nominee for Governor of the Bank of Japan (BOJ), stated at a hearing held that day that "monetary easing policies will continue," reducing expectations of interest rate hikes and causing the yen to weaken.

The domestic stock market's shift to a decline also pushed the exchange rate higher. On the day, the KOSPI closed at 2423.61, down 15.48 points (0.63%) from the previous trading day. Foreign investors net sold about 300.7 billion won worth of stocks in the KOSPI market.

The market is awaiting the release of the U.S. Personal Consumption Expenditures (PCE) price index scheduled for the afternoon. If the PCE indicator exceeds market expectations, concerns about tightening could intensify, leading to a stronger dollar.

Baek Seok-hyun, an economist at Shinhan Bank, said, "The won-dollar exchange rate surpassed 1300 won due to the weakness of the yuan and yen and the influence of foreign investor supply and demand." Regarding future exchange rate prospects, he predicted a box range movement for the next two weeks.

Economist Baek explained, "I expect the won-dollar exchange rate to pause starting today. The future outlook on the Fed's policy regarding U.S. inflation, which has driven recent dollar strength, is being reassessed, and most of the differences in views between the market and the Fed have been resolved, lowering the likelihood that related expectations will act as factors for further dollar appreciation in the near term."

He added, "Not only the recent dollar rise but also the won's weakness has been prominent, but most of these movements have been resolved due to differences or misunderstandings in market perspectives. There are no major events expected to impact the market in the next two weeks, so it is unlikely that the movements of the past three weeks will be repeated, and a lull is expected."

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