U.S. job growth exceeded expectations, leading to a stronger dollar and an increase in the won-dollar exchange rate to the 1360 won range.
As of 9:08 a.m. in the Seoul foreign exchange market, the exchange rate for the Korean won against the U.S. dollar stood at 1361.1 won. Earlier, at 6 a.m., the rate was trading at 1363.0 won, up 6.4 won from the previous day's closing rate.
The strong U.S. employment report released over the weekend raised expectations for a potential interest rate hike by the Federal Reserve, contributing to the dollar's strength. On November 6, the dollar index, which measures the dollar's value against six major currencies, rose by 0.67% to 102.280.
According to the U.S. Department of Labor, non-farm payrolls increased by 165,000 in October, significantly surpassing the market forecast of 59,000. The unemployment rate fell to 4.1%, down from 4.2% the previous month and below the expected 4.2%.
This has increased the likelihood of further tightening by the Federal Reserve, resulting in rising Treasury yields. The yield on the 10-year U.S. Treasury note rose by 5.1 basis points to 4.965%.
Meanwhile, U.S. stocks closed mixed as bargain hunting in semiconductor stocks emerged over the weekend. The Dow Jones Industrial Average fell by 237.33 points (0.46%) to close at 51,285.73.
The S&P 500 index rose by 23.13 points (0.31%) to finish at 7,376.86, while the tech-heavy Nasdaq Composite gained 264.43 points (1.09%) to close at 24,579.42.
International oil prices remained stable over the weekend. January Brent crude futures rose by 0.03% to $98.32 per barrel, while December West Texas Intermediate (WTI) crude increased by 0.34% to $90.83 per barrel.
The exchange rate is expected to rise further due to the dollar's strength. Min Kyung-won, an economist at Woori Bank, stated, "Today, the exchange rate is likely to attempt to recover the mid-1360 won support level, bolstered by the surprise employment data despite easing semiconductor sell-offs."
He added, "Speculative demand, along with bets on rising exchange rates in the options market and short covering by foreign investors who had bet on a stronger won, will increase upward pressure on the exchange rate. Additionally, real demand from importers and increased overseas stock investments by residents will contribute to raising the level to the mid-1360 won range."
* This article has been translated by AI.
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