Concerns Over Tariff War Spread ... Won-Dollar Threatens 1360 Level

Korea Economic Daily

Summary

The won-dollar exchange rate has fallen nearly 60 won this month due to concerns over the U.S.-originated tariff war, threatening the 1360 won mark.
The won-dollar exchange rate has recorded its lowest level since last October due to the weak dollar, which is analyzed to be influenced by the dollar index decline.
A researcher at KB Kookmin Bank stated that President Trump's tariff imposition warning is further stimulating the weak dollar momentum.

Nearly 60 Won Drop This Month

The won-dollar exchange rate has fallen to a level threatening the 1360 won mark due to concerns that the tariff war originating from the United States could spread.

On the 26th, the won-dollar exchange rate in the Seoul foreign exchange market closed the weekly trading at 1364.40 won, down 11.20 won from the 23rd. This is more than 2 won lower than the closing price of the overnight trading that ended at 2 a.m. on the 24th (1366.50 won). The won-dollar exchange rate has fallen by 56.60 won this month alone.

The won-dollar exchange rate started at 1369 won, down 6.60 won as soon as the market opened, and fell to 1360.40 won at one point in the morning. Based on the intraday low of weekly trading, it is the lowest level in seven months since October 15 last year (1355.90 won).

This exchange rate trend is analyzed to be influenced by the weak dollar. U.S. President Donald Trump warned on the 23rd (local time) that he could impose a 50% tariff on the European Union (EU) from next month, and on the 25th, he announced a deferral until July 9. As a result, the dollar index (DXY), which indicates the value of the dollar against the currencies of six major countries, fell to 98.78 as of 3:30 p.m. Lee Min-hyuk, a researcher at KB Kookmin Bank, analyzed, "President Trump's tariff threats are further stimulating the weak dollar momentum."

Reporter Left Dong-wook leftking@hankyung.com