Tariff Delay on Inauguration Day Causes Exchange Rate Drop…Relief for Parents of International Students [Trump's Second Term Begins]

Dollar Value Drops on WSJ Report

The dollar-won exchange rate significantly expanded its decline in overnight trading, retreating to the mid-1440s. This was due to reports that U.S. President Donald Trump would not announce additional tariffs on his first day in office, contrary to his previous declarations, weakening the dollar.

At 2 a.m. (Korean time) on the 21st, the dollar-won exchange rate closed at 1,444.00 won, down 14.30 won from the previous Seoul foreign exchange market closing price. Compared to the weekly closing price of 1,451.70 won during the trading session (9 a.m. to 3:30 p.m.), it was 7.70 won lower.

The dollar-won fell below 1,450 won early in the New York morning session after a Wall Street Journal (WSJ) report that President Trump decided to delay imposing additional taxes on his first day in office. The dollar-won hit an intraday low of 1,439.00 won at one point.

According to the WSJ, President Trump is scheduled to sign a memo on his inauguration day directing an investigation into the U.S. trade deficit and unfair trade practices by trading partners. The memo is expected to focus on China, Canada, and Mexico, but reportedly does not include new tariff impositions.

The dollar index, which shows the value of the dollar against six major currencies, plummeted to around 107.9 from slightly above 109 after the WSJ report. Nick Leeson, head of macro research at Monex Europe, said, "The market seems to take comfort in the headline that Trump's first-day tariffs were excluded from discussions," but added, "We think this assurance might be somewhat misplaced."

Reporter Jonghyun Song scream@hankyung.com