Won-Dollar Exchange Rate Hits New Four-Day Highs... "1350 Won Breakthrough Possible" (Comprehensive)

The won-dollar exchange rate has hit a new high for four consecutive trading days.

According to the Seoul foreign exchange market on the 27th, the won-dollar exchange rate closed at 1,338.0 won, up 1.7 won from the previous day.

The exchange rate opened at 1,338.0 won, up 1.7 won, and soared to 1,342.9 won around 12:47 PM past noon. It has raised its peak by hitting new highs for four consecutive trading days and maintaining a level above 1,340 won for two days in a row.

Concerns over a crisis in U.S. regional banks continued, triggering risk-averse sentiment. Additionally, with the prevailing expectation that the U.S. Federal Reserve (Fed) will raise the policy rate by 0.25 percentage points next month, caution over the widening interest rate differential with the U.S. has intensified. If the U.S. raises rates by 0.25 percentage points as expected next month, the interest rate gap with Korea will reach 1.75 percentage points, the largest ever.

Researcher Kim Chan-hee of Shinhan Investment Corp. said, "The recent relative weakness of the won against major currencies is due to concerns about fundamentals. The benefits from China are weaker than expected, and the spread of core inflation increases in Europe is raising concerns about tightening in developed countries."

Researcher Kim pointed out, "Seasonal dividend repatriation demand is also a factor driving the exchange rate increase until early May." Korean companies mainly pay dividends in April, and foreign investors convert the dividends they receive into dollars and remit them back to their home countries. Recently, with the won-dollar exchange rate soaring, foreign investors have been actively engaging in repatriation.

Researcher Kim said, "Ahead of next week's U.S. Federal Open Market Committee (FOMC) meeting, the upward trend in the won-dollar exchange rate is expected to continue for the time being, and a breakthrough above 1,350 won, which was seen as the upper limit, is also possible."

[Image source=Yonhap News]

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