Exchange Rate Falls Below 1,500 Won for First Time in Six Weeks, Closes Weekly at 1,498.5 Won (Update)

Weekly Closing Price Drops 29.7 Won from Previous Session
First Return to the 1,400-Won Range Since May 14

On July 8, the won-dollar exchange rate closed the week below 1,500 won for the first time in about a month and a half.

On this day, the weekly closing price of the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 p.m.) was 1,498.5 won, down 29.7 won from the previous trading day. This marks the first time the won-dollar exchange rate has fallen below 1,500 won at the weekly close since May 14 (1,491 won), and the first time it has dipped intraday since May 29 (1,494.9 won).

On the 8th, the exchange rates, KOSPI, and KOSDAQ indices are displayed on the index status board in the dealing room at the headquarters of Hana Bank in Jung-gu, Seoul. 2027.07.08 Photo by Dongju Yoon

After falling to the 1,510 won range following the previous day's weekly session, the won-dollar exchange rate temporarily rose amid heightened geopolitical tensions due to the attack on a ship in the Strait of Hormuz by Iran and retaliatory airstrikes by the United States. However, it later declined, reaching as low as 1,498.1 won toward the end of the week. The intraday high was 1,528.7 won, resulting in a fluctuation range of 30.6 won during the session, the largest since December 24 of last year (35.6 won).

The decline in the won-dollar exchange rate was largely driven by an easing in supply-demand imbalances. Lim Hwanyeol, a researcher at Woori Bank, explained, “A significant amount of dollar selling by exporters from early in the morning was a major driver behind the decline in the exchange rate. As the rate dropped by about 30 won from the previous day's high, market expectations shifted away from further rises toward a greater likelihood of the rate stabilizing downward.”

The Japanese yen, which tends to move in tandem with the won, was also affected by mounting caution from the Bank of Japan regarding recent peaks and rising expectations of coordinated action between the Korean and Japanese foreign exchange authorities. Lim added, “It seems that our own foreign exchange authorities are reacting more sensitively to the exchange rate. This atmosphere may have led market participants to conclude that further testing of the exchange rate peak is unlikely.”

The halt in foreign investor rebalancing, following a sharp drop in domestic stock prices, also appears to have played a part. On this day, foreign investors made net purchases totaling 331.192 billion won in the domestic KOSPI market, marking a return to net buying after 14 trading sessions. The dollar index (DXY), which reflects the value of the dollar against the six major currencies, stood at 100.97 as of 4:45 p.m., down from the previous session.

Lim noted, “Considering the recent pattern where importers see a drop of more than 10 won as a bargain-buying opportunity to purchase dollars, it is unlikely that the won-dollar exchange rate will fall to the mid-1,400 won range in the short term. However, as supply-demand imbalances have somewhat eased and exporters who were holding dollars are now actively selling, we can expect a gradual stabilization and moderate downward trend.”

This content was produced with the assistance of AI translation services.