Won-Dollar Exchange Rate Closes at 1270 Won Level... Won-Yen Exchange Rate Hits Lowest in 8 Years (Update)

[Image source=Yonhap News]

The US Federal Reserve (Fed) hinted at additional interest rate hikes, but with market expectations for the end of the tightening cycle still intact, the won-dollar exchange rate closed down at 1,271.9 won.

According to the Seoul foreign exchange market on the 16th, the won-dollar exchange rate closed at 1,271.9 won, down 8.6 won from the previous trading day's closing price. The exchange rate opened at 1,271.5 won, down 9.0 won, and fluctuated in the high 1,200 won range throughout the day.

Oh Chang-seop, a researcher at Hyundai Motor Securities, said, "Despite the possibility of further tightening by the US Fed, the preference for risk assets has revived, which contributed to the decline in the exchange rate," adding, "In the domestic stock market, foreign investors' net buying has continued, leading to a strong won phase."

The recent trend of dollar weakness continues. On the 15th (local time), the European Central Bank (ECB) raised its benchmark interest rate by 0.25 percentage points from 3.75% to 4.0%, strengthening the euro and weakening the dollar.

Additionally, the Bank of Japan held a monetary policy meeting on the same day and decided to maintain its large-scale monetary easing policy. Kazuo Ueda, who took office in April, decided to keep the Bank of Japan's short-term interest rate at -0.1% and maintain the long-term interest rate indicator, the 10-year government bond yield, at around 0%, continuing the easing policy.

As of 3:30 PM on the same day, the won-yen recalculated exchange rate was 903.82 won per 100 yen, down 2.38 won from the previous day's 3:30 PM reference price of 906.20 won. This is the lowest level since June 26, 2015 (905.40 won).

Researcher Oh said, "The Japanese yen has rapidly depreciated against the won, reaching its lowest level in eight years," and forecasted, "The yen's weakness is expected to continue for the time being, with the possibility of falling to the 800 won range per 100 yen."

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