SEOUL, December 19 (AJP) - The South Korean won surged past 1,450 to the U.S. dollar in early trading Thursday, its highest level in over 15 years, as a stronger dollar emerged in the wake of expectations for delayed interest rate cuts by the U.S. Federal Reserve.
In the Seoul foreign exchange market, the won was trading at 1,452.1 per dollar as of 9:10 a.m., up 16.6 won from Wednesday’s close. The rate opened at 1,453.0 won, a rise of 17.5 won, and remained at similar levels throughout the morning.
This marks the first time since March 16, 2009, during the global financial crisis, that the won-dollar exchange rate has surpassed the 1,450 threshold. On that day, the rate reached an intraday high of 1,488.0 won.
The recent climb follows weeks of relative stability, with the exchange rate hovering in the 1,430 range after briefly crossing 1,440 won in overnight trading on Nov. 4, amid heightened political tensions following the declaration of martial law by President Yoon Suk Yeol.
Analysts attribute the latest spike to compounded market uncertainty.Adding to the pressure was overnight action by the U.S. Federal Reserve. The central bank announced a 0.25 percentage point cut to its benchmark interest rate, a move that failed to ease concerns over dollar strength.
The soaring exchange rate has raised fresh concerns over South Korea’s economic stability, as a weakening won could increase import costs and exacerbate inflationary pressures in the months ahead.
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