Won-Dollar Exchange Rate Closes at 1265.2 Won... Surpasses Previous High for 4 Consecutive Trading Days

by Seo Sojeong

Published 27 Apr.2022 17:32(KST)

[Image source=Yonhap News]

[Asia Economy Reporter Seo So-jeong] The won-dollar exchange rate surged to the mid-1260 won range, hitting a new yearly high.

On the 26th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,265.2 won, up 14.4 won from the previous day's closing price. This is the highest level in over 2 years and 1 month since March 23, 2020 (1,266.5 won) based on the closing price.

On that day, the exchange rate started at 1,261.5 won and rose to 1,266.0 won during the session, surpassing the previous day's record high of 1,251.2 won. The won-dollar exchange rate has been hitting new yearly highs for four consecutive trading days since the 22nd.

The dollar's strength continues as concerns over the U.S. Federal Reserve's (Fed) monetary tightening intensify, the prolonged Ukraine war persists, and economic slowdown fears spread due to China's lockdown measures.

With the psychological resistance level of 1,250 broken, the market expects the upward trend to continue for the time being. It is anticipated that exchange rate volatility will inevitably increase until the U.S. Federal Open Market Committee (FOMC) meeting scheduled for the 3rd-4th of next month (local time).

Especially as the dollar's ultra-strength continues due to recent external factors, the market believes that the domestic foreign exchange authorities' smoothing operations will find it difficult to halt the strong dollar trend.

Jeon Gyu-yeon, a researcher at Hana Financial Investment, said, "The strong dollar continues due to global factors, so intervention by foreign exchange authorities will not be easy," adding, "A directional shift is expected after the U.S. FOMC." Oh Chang-seop, a researcher at Hyundai Motor Securities, added, "If the current steep rise in the exchange rate continues, the 1,250 level could serve as support, and 1,300 won might become the upper limit."