The won-dollar exchange rate opened lower as expectations for U.S. interest rate hikes weakened.
As of 9:22 a.m. on July 3, the exchange rate in the Seoul foreign exchange market stood at 1546.4 won per dollar, opening at 1544.5 won, down 11.3 won. This marks the lowest level since June 30, when it was 1543.1 won.
The decline in the dollar's value appears to be influenced by weak U.S. employment figures, which have diminished expectations for interest rate increases. The dollar index, which measures the dollar against six major currencies, fell by 0.51% to 100.88.
According to the U.S. Department of Labor, non-farm employment increased by 57,000 in June, significantly below market expectations of 115,000, as reported by Dow Jones.
In response, the CME FedWatch tool indicated that the probability of a rate hike at the Federal Open Market Committee (FOMC) meeting on July 29 is now below 30%. Additionally, the likelihood of a rate increase in September dropped from 66% to 51%, while the probability of maintaining the current rate for the year rose from 17% to 23%.
International oil prices remained stable as U.S.-Iran peace negotiations concluded without significant progress. September futures for Brent crude rose by 0.32% to $71.80 per barrel.
August futures for West Texas Intermediate (WTI) also increased by 0.16%, closing at $68.69 per barrel.
In the domestic stock market, foreign investors continued to sell off, with net sales of 899.8 billion won in the early trading session of the securities market.
The exchange rate is expected to face increased downward pressure. Min Kyung-won, an economist at Woori Bank, predicted, "The yen, which has shown a strong correlation with the won, has surged due to government intervention, which will likely increase downward pressure on the won-dollar rate as well."
He added, "From a supply-demand perspective, the drop in the exchange rate due to export companies confirming short-term peaks will directly impact the market, and the liquidation of bets on a rising won-dollar rate in the options market will likely contribute to a stronger won."
* This article has been translated by AI.
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