The exchange rate between the South Korean won and the U.S. dollar has fallen to the low 1480s as concerns over U.S. inflation ease and upward pressure on the dollar diminishes.
On July 16, the exchange rate in the Seoul foreign exchange market was 1484.0 won per dollar. As of 6 a.m. that day, the rate had decreased by 6.00 won from the previous day's closing price of 1487.00 won.
The decline in the dollar is attributed to a lower-than-expected increase in the U.S. Consumer Price Index (CPI) and a drop in the Producer Price Index (PPI), which has alleviated inflation concerns.
The U.S. Department of Labor reported that the PPI fell by 0.3% in June, falling short of the expert forecast of a 6.2% increase. This marks the first month-on-month decline since August of last year, when it dropped by 0.2%.
As a result, U.S. stock markets also saw gains. The Dow Jones Industrial Average closed up 150.37 points (0.29%) at 52,658.64. The S&P 500 rose by 28.81 points (0.38%) to finish at 7,572.40, while the Nasdaq Composite increased by 162.22 points (0.62%) to close at 26,269.23.
The dollar index, which measures the dollar's value against six major currencies, fell by 0.415% to 100.515.
International oil prices continued to rise amid tensions over shipping rights in the Strait of Hormuz between the U.S. and Iran. September Brent crude futures increased by 0.26% to $84.95 per barrel, while August West Texas Intermediate (WTI) crude futures rose by 0.33% to $79.60.
In the domestic stock market, foreign investors are showing a selling trend. After recording net purchases the previous day, foreign investors sold a net 546.1 billion won in the early trading session of the securities market.
The exchange rate is expected to decline further due to the dollar's weakness. Min Kyung-won, an economist at Woori Bank, stated, "We anticipate a drop in the exchange rate amid the dollar's weakening trend due to expectations of peaking inflation."
He added, "Expectations for additional interest rate hikes by the U.S. Federal Reserve have weakened, and the pressure from a strong dollar has also eased. A more significant factor is the alleviation of regional supply and demand imbalances, which, combined with foreign capital outflows and export companies' negotiations, will likely exert downward pressure on the exchange rate."
* This article has been translated by AI.
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