Won–dollar exchange rate plunges 25.2 won… closes at 1,440.6 won on “Mar-a-Lago accord” speculation

Korea Economic Daily

Summary

The won–dollar exchange rate was said to have closed at 1,440.6 won, plunging 25.2 won from the previous day.
The yen was said to have surged sharply on expectations of a so-called “Mar-a-Lago accord,” under which the U.S. supports Asian currencies, as well as prospects of intervention by both the U.S. and Japan.
U.S. Treasury Secretary Scott Bessent was quoted as saying the recent decline in the won’s value is excessive relative to the fundamentals of the Korean economy.

The won–dollar exchange rate fell sharply. This was driven by expectations surrounding the so-called “Mar-a-Lago accord,” under which the United States is seen as backing Asian currencies.

On the 26th, the won–dollar rate opened at 1,446.1 won, down 19.7 won from the previous day. Losses deepened in the afternoon, and the onshore close (as of 3:30 p.m.) ended at 1,440.6 won, a steep drop of 25.2 won from the day before. This marked the biggest decline in two months, since late December when authorities signaled strong willingness to intervene.

The yen was behind the move. The yen surged on expectations that the U.S. and Japan could intervene directly. The won, which tends to move in tandem with the yen, also came under stronger downside pressure.

According to foreign media reports, market sentiment has turned unusual. In global FX markets, speculation is mounting that the “Mar-a-Lago accord” has actually been put into operation.

In particular, attention is on reports that U.S. Treasury Secretary Scott Bessent met with Korea’s top economic official and separately discussed the won. Secretary Bessent even made the unusual remark that “the recent decline in the won is excessive relative to the fundamentals of the Korean economy.”

Reporter Dae-cheol Lim playlim@hankyung.com