Won Nears 1,550 Per Dollar After Five Straight Gains, Highest Since Financial Crisis

Exchange Rate Hits Highest Level Since Global Financial Crisis

South Korea’s won fell to its weakest level against the dollar since the global financial crisis, nearing the 1,550 mark. Concerns over US inflation and expectations for tighter Federal Reserve policy have continued to bolster the dollar.

In Seoul trading on June 26, the won was at 1,547.5 per dollar as of 9:50 a.m., 4.8 won weaker than the previous daytime-session close of 1,542.7 at 3:30 p.m. a day earlier. The currency opened at 1,547.3 per dollar, down 4.6 won, and extended its losses as it approached 1,550.

The won closed the previous daytime session at 1,542.7 per dollar, 0.9 won weaker on the day, marking a second straight close in the 1,540s. That was the weakest daytime-session close since March 9, 2009, when the exchange rate stood at 1,549.0 per dollar. The exchange rate has risen every day since June 22. Aside from a 0.1 won decline on June 19, it has moved higher without interruption since June 16.

The dollar has remained firm as worries about US inflation and the outlook for Fed tightening have grown. The US personal consumption expenditures price index for May, released overnight, rose 4.1% from a year earlier, the biggest increase since April 2023. The reading matched market expectations. Still, it pointed to persistent price pressures and reinforced the case for a Fed rate increase.

Lee Min-hyuk, an analyst at KB Kookmin Bank, said an offshore dollar correction and lower short-term US interest rates were factors on the downside. Even so, a rebound in oil prices and yen weakness are limiting any turn toward won strength. Demand for dollars linked to foreign investors' net selling of local stocks also remains in place.

Kang Kyung-ju, Hankyung.com reporter, qurasoha@hankyung.com