Exchange Rate Stabilizes Amid 'Samcheonpi' Rally: 14.6 KRW Drop in a Day [Hankyung FX Market Watch]

With the KOSPI index surpassing 3,000 and showing strong gains, the KRW-USD exchange rate fell sharply (the value of the won rose). This was influenced by an increase in net purchases by foreign investors. News of the U.S. holding off on Middle East intervention also boosted risk asset preference, further strengthening the Korean won.

On the 20th at the Seoul foreign exchange market, the KRW-USD exchange rate (as of 3:30 p.m.) finished weekly trading at 1,365.60, down 14.60 from the previous day. The rate, which had climbed above the 1,380 level the previous day, dropped to the 1,360 range in just one day.

The day started at 1,375.40, 4.80 less than the day before. The decline intensified around 11 a.m., when the KOSPI broke through the 3,000 mark during the session.

Remarks by Donald Trump, President of the United States, that he would decide within two weeks whether to attack Iran, led to interpretations that the possibility of immediate U.S. military involvement had decreased. The U.S. Dollar Index, which measures the dollar's value against six major currencies, fell by 0.48% from the previous day to 98.636.

With risk aversion easing and preference for the safe-haven dollar declining, the KOSPI topped 3,000 at the closing price for the first time in three and a half years, strengthening the buying momentum among foreign investors. The KOSPI closed up 44.10 points (1.48%) at 3,021.84. On this day, foreign investors were net buyers of approximately ₩561.9 billion in the KOSPI market.

As of 3:30 p.m., the KRW-JPY cross rate was 939.30 per 100 yen. This was down 10.96 from the previous day's 3:30 p.m. close. The JPY-USD exchange rate rose 0.12% to 145.4 yen.

Jingyu Kang, Reporter josep@hankyung.com