"Interest Rate Cut Expectations Were Excessive" Won-Dollar Exchange Rate Closes Up 4.4 Won (Update)

[Image source=Yonhap News]

On the 3rd, the won-dollar exchange rate closed up more than 4 won.

On that day, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,304.8 won, up 4.4 won from the previous day.

Expectations for a U.S. interest rate cut had been excessively priced in, leading to a reassessment of those expectations, which in turn weakened risk appetite.

The exchange rate opened at 1,311 won, 10.6 won higher than the previous day, which was the first trading day of the year in the foreign exchange market.

However, due to caution ahead of major events such as the release of the U.S. Federal Open Market Committee (FOMC) minutes and U.S. employment data this week, the fluctuation range was limited.

Kwon Amin, a researcher at NH Investment & Securities, said, "The downward stabilization of the dollar is expected to be maintained, but considering the pre-adjusted perception and the relative economic gap, further weakening of the dollar is limited," adding, "We place more weight on the possibility of medium- to long-term strength."

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