Weak Dollar on Eased U.S. Inflation Concerns...Exchange Rate Declines Again

As concerns over rising prices in the United States have eased, the dollar has weakened and the exchange rate has dropped again within a day.

As of 11:09 a.m. on the 12th at the Seoul foreign exchange market, the KRW-USD exchange rate is trading at ₩1,370. The exchange rate started the day at ₩1,369, down ₩6.0 from the previous day, and the downward trend continues.

With inflationary pressure in the United States easing, the dollar showed weakness overnight.

The U.S. Consumer Price Index for May rose 0.1% from the previous month, falling short of the expected 0.2%.

Despite President Donald Trump's tough tariff policy, expectations are growing that the Federal Reserve’s rate cut could come sooner as inflation fears subside.

The U.S. Dollar Index, which shows the value of the dollar against the currencies of six major countries, was down 0.69% from the previous day, recording 98.501.

Market participants expect that the weaker dollar will put downward pressure on the KRW-USD exchange rate.

KB Kookmin Bank predicted, "Due to the weak dollar and risk appetite, the exchange rate is likely to try to settle in the ₩1,360 range," and added, "It will attempt to stabilize at this level."

In addition, it was analyzed that "an amicable atmosphere in the U.S.-China trade negotiations and net buying of domestic stocks by foreign investors leading to dollar selling will also contribute to the decline in the exchange rate."

Meanwhile, Hana Bank pointed out, "The detailed provisions of the U.S.-China trade negotiation agreement have not been disclosed, and as geopolitical tensions in the Middle East are rising, the extent of the exchange rate’s decline is expected to be limited."

Reporter Kim Ye-won yen88@wowtv.co.kr