iM "Shaky Dollar, Strengthening Yen... Exchange Rate Band 1420~1460 Won"

Analysis suggests that uncertainty surrounding U.S. President Donald Trump's tariff policies and a slowdown in U.S. economic indicators are likely to exert downward pressure on the dollar for the time being. With confirmed dollar weakness and yen strength, particular attention should be paid this week to whether the yen will strengthen further.

Park Sang-hyun, a researcher at iM Securities, stated in the Fx (foreign exchange) brief "Shaky Dollar, Strengthening Yen" released on the 24th, "We expect the dollar-won exchange rate band to be between 1420 and 1460 won this week."

First, Park noted that U.S. economic indicators such as the S&P Services Index and the University of Michigan Consumer Sentiment Index final figures released last week fell short of market expectations, causing the dollar index?which measures the dollar's value against six major currencies?to show a slight decline. He evaluated that "uncertainty over Trump's policies negatively affected various sentiment indicators, exerting downward pressure on the dollar."

During the same period, the euro also showed a pause in its movement, declining by 0.3% compared to the previous week. Park explained, "Despite improvements in indicators, caution regarding the German general election led to euro weakness." Additionally, he pointed out that "the dollar-yen exchange rate fell to 149 yen, causing the yen's value to surge," attributing this to "increased expectations for additional interest rate hikes by the Bank of Japan (BOJ) following a 4% year-on-year rise in Japan's January Consumer Price Index (CPI)."

Last week, the dollar-won exchange rate also continued its downward trend. Park analyzed, "Trump's tariff policies remain a source of uncertainty for the won's movement," but added, "rallies in Chinese stock markets and yen strength are exerting upward pressure on the won." As of the 21st, the dollar-won exchange rate stood at 1433.8, down 0.56% from the previous week, indicating an appreciation of the won.

Accordingly, Park predicted that "the dollar's weakness is expected to continue," emphasizing the need to watch for further yen strength this week. He suggested a dollar-won exchange rate band of 1420 to 1460 won and noted, "Attention should be paid to whether the synchronization between the won and yen will strengthen again." He also added that the outcome of the German general election could be a variable affecting the euro.

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