Won-Dollar Exchange Rate Closes at Highest Level in 9 Months... "Attempts to Break Annual Highs Will Continue"

The won-dollar exchange rate closed at its highest level in about nine months, linked to the weakness of the yuan.

According to the Seoul foreign exchange market on the 21st, the won-dollar exchange rate closed at 1,342.6 won, up 4.3 won from the previous trading day.

This is the highest closing price since November 23 of last year (1,351.8 won). The exchange rate, which opened at 1,340.0 won, up 1.7 won from the previous trading day, showed an upward trend in line with the weakening yuan.

Just before the market closed, the increase widened to 1,342.8 won, approaching the yearly high of 1,343.0 won.

On the day, the People's Bank of China lowered the 1-year Loan Prime Rate (LPR) by 0.1 percentage points to 3.45% per annum and kept the 5-year LPR, which affects mortgage loans, unchanged. The rate cut was below market expectations, causing disappointment in the Greater China stock markets, and the yuan weakened, exceeding 7.3 yuan per dollar.

Park Sang-hyun, a researcher at Hi Investment & Securities, said, "With abundant factors for won weakness such as a sharp rise in U.S. Treasury yields, China risks, and yen weakness, the won-dollar exchange rate's rapid rise is unlikely to subside, and attempts to break the yearly high are expected to reappear." He added, "Amid a wait-and-see stance ahead of the Jackson Hole meeting to be held on the 25th, the won-dollar exchange rate is expected to move between 1,310 won and 1,360 won in the coming weeks."

[Image source=Yonhap News]

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