The won-dollar exchange rate has dropped to the 1330s for the first time in 1 year and 11 months.
As of 9:34 a.m. on September 7 in the Seoul foreign exchange market, the exchange rate stands at 1,339.5 won against the U.S. dollar. This marks the lowest level since October 4, 2024, when it was 1,331.3 won.
At 6 a.m. the same day, the exchange rate was trading at 1,350.1 won, down 0.3 won from the previous trading day's closing price of 3:30 p.m.
At the same time, the dollar index, which measures the value of the dollar against six major currencies, recorded a decrease of 0.08 to 99.10.
The decline in the exchange rate, despite the dollar's upward trend, is attributed to foreign investors' net buying in the domestic stock market. In the early trading session, foreign investors have purchased 669.8 billion won in the securities market.
However, the exchange rate is expected to rise due to stronger-than-expected new job numbers in the U.S. for August, which have increased the likelihood of interest rate hikes by the Federal Reserve.
Min Kyung-won, an economist at Woori Bank, stated, "Concerns about a surprise rate hike by the Fed in September are growing, and as the dollar index rises against major currencies, it is likely to put a brake on the won's strength. From a supply-demand perspective, the need for low-priced purchases by importers who need to remit payment mid-month and the demand for currency exchange for residents investing in overseas stocks will lead to an increase in the exchange rate."
He added, "However, the influx of selling from exporters may support the upper limit of the exchange rate, and if concerns about further declines in the exchange rate lead to an influx of corporate negotiation volumes in the form of chasing sales, it may open the door for additional short-term declines in the exchange rate."
* This article has been translated by AI.
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