The exchange rate between the South Korean won and the U.S. dollar is declining as concerns over artificial intelligence (AI) investments ease following Google's strong performance.
As of 9:45 a.m. in the Seoul foreign exchange market, the won is trading at 1,473.2 won per dollar.
The exchange rate opened at 1,477.5 won, down 2.6 won from the previous day's closing price, and has continued to decline.
Google reported results that exceeded market expectations and raised its annual capital expenditure (CAPEX) forecast, alleviating concerns about reduced AI investments. The uncertainty surrounding the profitability and scale of AI investments, which had recently been cited as a reason for the weakness in semiconductor stocks, has improved, boosting global risk appetite.
As a result, foreign net buying is expected to flow into the domestic stock market, particularly in Samsung Electronics and SK Hynix. The increase in offshore custody dollar sales during the foreign stock buying process is likely to exert downward pressure on the won-dollar exchange rate.
However, geopolitical tensions in the Middle East are supporting the lower end of the exchange rate. On July 22, U.S. forces conducted additional airstrikes against Iran. Both sides have warned of potential attacks on civilian infrastructure, raising tensions once again.
Min Kyung-won, an economist at Woori Bank, stated, "The recovery of risk appetite due to Google's strong performance, along with the custody volume from foreign net buying and the chasing sales from exporters, will support the strength of the won. If the European Central Bank (ECB) monetary policy meeting tonight is interpreted as hawkish, it could lead to euro strength and dollar weakness, adding further downward pressure on the exchange rate."
As of 9:45 a.m. in the Seoul foreign exchange market, the won is trading at 1,473.2 won per dollar.
The exchange rate opened at 1,477.5 won, down 2.6 won from the previous day's closing price, and has continued to decline.
Google reported results that exceeded market expectations and raised its annual capital expenditure (CAPEX) forecast, alleviating concerns about reduced AI investments. The uncertainty surrounding the profitability and scale of AI investments, which had recently been cited as a reason for the weakness in semiconductor stocks, has improved, boosting global risk appetite.
As a result, foreign net buying is expected to flow into the domestic stock market, particularly in Samsung Electronics and SK Hynix. The increase in offshore custody dollar sales during the foreign stock buying process is likely to exert downward pressure on the won-dollar exchange rate.
However, geopolitical tensions in the Middle East are supporting the lower end of the exchange rate. On July 22, U.S. forces conducted additional airstrikes against Iran. Both sides have warned of potential attacks on civilian infrastructure, raising tensions once again.
Min Kyung-won, an economist at Woori Bank, stated, "The recovery of risk appetite due to Google's strong performance, along with the custody volume from foreign net buying and the chasing sales from exporters, will support the strength of the won. If the European Central Bank (ECB) monetary policy meeting tonight is interpreted as hawkish, it could lead to euro strength and dollar weakness, adding further downward pressure on the exchange rate."
* This article has been translated by AI.
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