Won-Dollar Exchange Rate Starts Lower on US CPI Below Expectations (Update)

The US Consumer Price Index (CPI) fell short of expectations, leading to a decline in the won-dollar exchange rate at the start of trading.

According to the Seoul foreign exchange market on the 11th, as of 9:05 a.m., the won-dollar exchange rate was 1,317.1 won, down 7.8 won from the previous day.

On this day, the exchange rate opened at 1,317.4 won, down 7.4 won from the previous day's closing price, and has been fluctuating in the mid-1310 won range.

The US Department of Labor announced on the 10th (local time) that the April CPI rose 4.9% compared to the same month last year. This is the smallest increase since April 2021. The increase narrowed compared to March (5.0%) and slightly missed market expectations (5.0%).

The market is increasingly expecting the Federal Reserve (Fed) to keep the benchmark interest rate unchanged at the next meeting due to the slowdown in the US CPI.

Seunghyuk Kim, a researcher at NH Futures, said, "With the April US CPI falling short of expectations, inflation stabilization expectations are rising, and as risk appetite revives, the won-dollar exchange rate is likely to return to the mid-1310 won range." He added, "If exporters release negotiated volumes (dollar sales) in the form of selling at peak prices, the exchange rate decline could deepen."

[Image source=Yonhap News]

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