The previously stable KRW-USD exchange rate is now approaching 1,400 KRW
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- It was reported that the recent KRW-USD exchange rate closed at 1,392.6 KRW, the highest level in about two months.
- It was stated that the main cause is the strong dollar due to receding expectations for a U.S. rate cut.
- It was said that U.S. inflation concerns and the prospect of a delayed rate cut are linked to the rising exchange rate, meaning investors should take note.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Strong Dollar Effect... Closed at 1,392.6 KRW
The KRW-USD exchange rate has once again climbed close to the 1,400 KRW mark (a decline in the value of the won). This is analyzed to be due to the strengthening of the dollar as expectations for a U.S. policy rate cut have receded.
On the 17th in the Seoul foreign exchange market, the KRW-USD rate (as of 3:30 p.m.) closed the week at 1,392.60 KRW, up 6.90 KRW from the previous day. It is the highest level in about two months since May 19th (1,397.80 KRW). The exchange rate opened at 1,388 KRW, up 2.30 KRW, and surpassed 1,390 KRW around 9:40 a.m. Shortly before closing, it even rose to 1,392.90 KRW.
The rise in the exchange rate is due to the strong dollar triggered by shifting expectations about a U.S. rate cut. Inflation concerns are growing in the United States. As tariff impositions prevent the Producer Price Index (PPI) from showing a clear downward trend, the Consumer Price Index (CPI) also shows signs of rising. Accordingly, the prospect of a delay in rate cuts is increasing. According to the CME FedWatch Tool, the probability that the U.S. central bank (the Federal Reserve) will keep its policy rate unchanged at 4.25~4.50% in July is 97.4%.
The dollar index, which measures the value of the dollar against six major currencies, rose 0.52% from the previous day to 98.780.
Jin-Kyu Kang, josep@hankyung.com
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