Won·dollar exchange rate breaks 1460 won in weekly trading…highest in 7 months

The won·dollar exchange rate surpassed 1460 won intraday.

As of 10:50 a.m. on the 11th in the Seoul foreign exchange market, the won exchange rate against the U.S. dollar stands at 1464.1 won. The rate, which opened at 1456.4 won, is gradually widening its gains. It is the first time in 7 months since April that the rate has exceeded 1460 won in weekly trading.

The dollar strengthened amid expectations of the U.S. federal government shutdown being lifted, and the won depreciated as a result. As the U.S. Senate entered final discussions to end the shutdown, U.S. President Donald Trump expressed willingness to accept a compromise. At the swearing-in ceremony for the U.S. ambassador to India held at the White House on the 10th (local time), President Trump, when asked whether he would accept the shutdown agreement being negotiated in the Senate, said, "Yes," and added, "We will open the country very quickly."

Min Kyung-won, an economist at Woori Bank, said, "The value of the dollar is showing strength as expectations of a U.S. economic boost from the end of the shutdown are reflected," and added, "The New York stock market rallied and prices rose mainly in growth stocks, which is expected to lead (domestic) residents to expand overseas stock investment and continuously generate demand for currency exchange."

He added, "Dollar real demand buying, led by importers, is also likely to drive the exchange rate higher," and "Foreign long positions betting on U.S. economic improvement are expected to join in and propel the exchange rate's upward trend."

The yen is also weak. Japan's Prime Minister Sanae Takaichi said the day before, "We will maintain Japan's sustainable finances to secure market confidence," while also saying, "However, if investment does not increase, the economy will not grow." The remarks were interpreted as prioritizing economic stimulus over fiscal soundness and triggered yen weakness.

However, there are forecasts that the won's decline will be limited. Economist Min said, "Net buying by foreign investors in the domestic stock market due to improved risk asset preference and negotiated volumes from exporters may flow in." Woori Bank expects the won·dollar exchange rate to move in the 1451~1460 won range that day.

Jin Young-gi, Hankyung.com reporter young71@hankyung.com