Outside Tariffs, Inside Impeachment... Exchange Rate Nears 1470 Won per Dollar [Hankyung Forex Market Watch]

The won-dollar exchange rate rose to around 1470 won. It is analyzed that the value of the won is falling as the global trade war intensifies and domestic political instability continues.

On the 21st, the won-dollar exchange rate (as of 3:30 p.m.) in the Seoul foreign exchange market ended weekly trading at 1462.70 won, up 3.80 won from the previous day. The exchange rate started at 1466.50 won, up 7.60 won from the previous day, and rose to a high of 1469.50 won during the day. Based on the weekly trading high, it rose to the highest level since the 3rd of last month (1472.50 won). In overnight trading, it was traded at 1470.50 won the previous day. The weekly closing price was the highest since the 3rd (1463.40 won).

It is analyzed that domestic political uncertainty is acting as a factor for the weak won. The Constitutional Court has been deliberating the impeachment trial of President Yoon Suk-yeol almost every day since concluding arguments on the 25th of last month, but has not been able to designate a sentencing date for more than three weeks after concluding arguments.

The Democratic Party, the Progressive Party, the Basic Income Party, and the Social Democratic Party jointly proposed an impeachment motion against Acting President and Deputy Prime Minister for Economic Affairs Choi Sang-mok. However, with the sentencing of Prime Minister Han Deok-soo's impeachment trial scheduled for the 24th, and the sentencing of President Yoon Suk-yeol's impeachment trial expected afterward, the vote on Acting President Choi's impeachment motion is uncertain. Min Kyung-won, a researcher at Woori Bank, explained, "The prolonged uncertainty related to impeachment is acting as an Achilles' heel for the won."

The dollar continued to strengthen in the Asian market following the previous night. It is interpreted that concerns about the imposition of U.S. tariffs and the global trade war have resurfaced. The dollar index, which indicates the value of the dollar against the currencies of six major countries, is at 104.062, up 0.56% from the previous day.

However, the authorities' intervention vigilance and foreign investors' buying trend in the domestic stock market limited the rise in the exchange rate. On this day, the KOSPI closed at 2,643.13, up 6.03 points (0.23%) from the previous day. Foreigners net bought about 844.4 billion won in the stock market on this day.

As of 3:30 p.m., the won-yen cross rate is 978.23 won per 100 yen. It fell 6.22 won from the previous day's same time standard price of 984.45 won. The yen-dollar exchange rate is 149.510 yen, up 0.89%.

Reporter Kang Jin-kyu josep@hankyung.com