Dollar Strengthens on Interest Rate Cut Signal... Won-Dollar Exchange Rate Rises (Update)

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The won-dollar exchange rate continues to rise as the dollar strengthens on signals of interest rate cuts from major central banks.

As of 10:12 a.m. on the 25th, the won-dollar exchange rate in the Seoul foreign exchange market is trading at 1,344.21 won, up 0.41 won from the previous trading day. The rate opened at 1,343.8 won, up 5.4 won from the previous day, maintaining its upward trend.

The rise today was driven by the strong dollar. It is analyzed that the robust U.S. economic indicators and interest rate cuts by major central banks such as Switzerland led to the dollar's strength.

On the 21st (local time), the U.S. Manufacturing Purchasing Managers' Index (PMI) for March was announced at 52.5, the highest since June 2022, once again proving the strength of the U.S. economy.

Additionally, on the 21st (local time), the Swiss National Bank cut its benchmark interest rate, and major central banks including the Bank of England (BOE) signaled plans to lower their rates, causing the dollar index, which represents the value of the dollar, to rise.

As major reserve currencies such as the euro and pound weakened, the dollar index entered the 104 level. Typically, when the dollar index rises, the won-dollar exchange rate tends to increase as well.

However, there are also forecasts that the exchange rate will decline from its current level. Kim Ho-jung, a researcher at Yuanta Securities, said, "The future direction of global monetary policy is uncertain, and there is demand for dividend remittances by foreigners and trade settlements at the end of the quarter," adding, "It is expected to fall to the 1,310?1,320 won range in April."

Jo Yong-gu, a researcher at Shin Young Securities, forecasted, "In the short term, the U.S. economy shows a robust trend, and major advanced countries are expected to cut interest rates more proactively than the U.S.," adding, "It is expected to move between 1,300 and 1,350 won for a while."

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