PiCK
Won-Dollar Exchange Rate Rises After Han Duck-soo's Impeachment Dismissal…Linked to Dollar and Yuan Movements [Hankyung Foreign Exchange Market Watch]
Summary
- It was reported that the won-dollar exchange rate surged to its highest level since mid-January after Prime Minister Han Duck-soo's impeachment dismissal.
- The decline in the won's value was analyzed to be linked to the movements of the dollar and yuan.
- Amid growing caution about possible intervention by the foreign exchange authorities, the exchange rate hovered in the mid-to-high 1,460 won range.
The won-dollar exchange rate rose to its highest level in about 70 days since mid-January (the value of the won fell). After the dismissal of Prime Minister Han Duck-soo's impeachment was decided, the rate increased from around 10 a.m. The linkage of the won to the movements of the dollar and yuan is also cited as a factor for the rise in the exchange rate.
On the 24th, the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 p.m.) ended weekly trading at 1,467.70 won, up 5 won from the previous trading day. This is the highest level based on the weekly closing price since January 13 (1,470.30 won).
The exchange rate started at 1,463 won, up 30 jeon from the previous trading day. It showed a wait-and-see attitude in the early session, then rose around 10 a.m. when the impeachment motion against Prime Minister Han Duck-soo was dismissed. At one point, it rose to 1,469.10 won. There was an assessment that uncertainty was not resolved as the Constitutional Court did not judge the legality of martial law, and President Yoon Suk-yeol's sentencing date was not disclosed.
There is also a view that the movements of the U.S. dollar and Chinese yuan at this time coincided with the weakening of the won. The dollar index, which shows the value of the dollar against six major currencies, rose from 103.99 around 9 a.m. to 104.14 around 10:40 a.m. The People's Bank of China announced the yuan-dollar reference rate at 7.1780 yuan per dollar, 0.002 yuan higher than the previous day. The depreciation of the Chinese yuan was linked to the won.
Ahead of the 1,470 won line, caution about possible intervention by the foreign exchange authorities increased, and the rate hovered in the mid-to-high 1,460 won range. The dollar index also fell back to around 103.99 in the afternoon.
As of 3:30 p.m., the won-yen fiscal exchange rate was 980.98 won per 100 yen. It rose 2.75 won from the previous day's 3:30 p.m. standard of 978.23 won. The yen-dollar exchange rate was up 0.06% at 149.615 yen per dollar.
Reporter Kang Jin-kyu josep@hankyung.com
Korea Economic Daily
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