iM: "This Week's Exchange Rate Band Set at 1,450-1,490 Won per Dollar... What Are the Variables?"

This week, the dollar-won exchange rate is expected to remain within a boxed range amid concerns over further weakening of the Korean won. Key variables include the movement of the Japanese yen, additional outflows of foreign capital from the stock market, and potential government intervention.

Park Sanghyun, a researcher at iM Securities, stated in the weekly exchange rate report titled "Credit Risk and Continued Uncertainty Over the December FOMC" on November 24 that the dollar-won exchange rate band for this week is projected to be between 1,450 and 1,490 won.

First, Park pointed out that the dollar-won exchange rate has returned to the 1,470-won level, citing factors such as the strong US dollar, the weak Japanese yen, and net selling by foreign investors totaling approximately 12.3 trillion won in stocks on the Korea Exchange in November.

Last week, the US dollar strengthened due to risk aversion stemming from the artificial intelligence (AI) bubble theory and continued tightness in the short-term money market. In addition, growing uncertainty over the interest rate decision ahead of the December Federal Open Market Committee (FOMC) meeting also contributed to upward pressure on the dollar.

Park commented, "Volatility is expected to persist due to ongoing uncertainty over the December FOMC rate decision and continued tightness in the short-term money market," adding, "The movement of the yen exchange rate will be closely watched this week. After the disappearance of economic stimulus factors from the Sanae Takaichi Cabinet in Japan, the dollar-yen exchange rate trend could not only further strengthen the dollar, but also have a significant impact on the dollar-won exchange rate."

However, Park also noted, "There is a growing sense of caution regarding possible government intervention at the 1,470-won-per-dollar level." He emphasized that in this week's foreign exchange market, "Along with the movement of the yen, additional outflows of foreign capital from the stock market and the possibility of government intervention at the 1,470-won level per dollar will be important variables."

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