Won-Dollar Exchange Rate Falls to 1,340 Won Range Intraday... First Time in 14 Months (Update)

Fell to 1,349.5 won at 3:14 p.m.

Weekly closing rate hits lowest since June 30 last year

The won-dollar exchange rate fell below 1,350 won during intraday trading for the first time in a year and two months.

On September 4, in the Seoul foreign exchange market, the won-dollar exchange rate was 1,350.4 won as of 3:30 p.m., down 8.9 won from the previous trading day.

The exchange rate opened at 1,358.5 won and fluctuated within the mid-1,350 won range, before dropping to 1,349.5 won at 3:14 p.m. The rate then rebounded to 1,350.4 won by 3:30 p.m., once again testing the 1,350-won mark at 3:44 p.m. by recording 1,349.9 won.

This is the first time since July 1 last year, when it reached 1,348.5 won, that the intraday won-dollar rate has fallen below 1,350 won. In terms of the weekly closing price, it is also the lowest since June 30 last year (1,350.0 won). Compared to the recent peak of 1,559.2 won on July 1, the rate has declined by as much as 209 won in just two months.

Yonhap News Agency

Factors cited for this decline include the easing of concerns over additional monetary tightening by the U.S. Federal Reserve, dollar selling by exporters, and strong upward pressure on the Japanese yen. On September 3 (local time), Federal Reserve Governor Christopher Waller stated, "Recent indicators show some signs of disinflation," adding, "If the indicators to be released over the next two weeks continue this trend, I will lean toward supporting a hold in the policy rate." The market has interpreted Waller’s remarks as dovish (favoring monetary easing).

The yen’s strength, driven by possible intervention from Japanese foreign exchange authorities, also appears to have affected the won-dollar exchange rate. Atsushi Mimura, Vice Minister of Finance for International Affairs of Japan, recently remarked regarding the yen's movements, "I am neither satisfied nor reassured by anything," emphasizing that they "remain on full alert." As a result, the yen-dollar exchange rate in the New York foreign exchange market fell from 158 yen to the 155 yen range on September 3, with the rate at 156.185 yen as of 3:30 p.m. that day—a drop of 1.03 yen. The dollar index, which measures the value of the U.S. dollar against six major currencies, fell 0.36 to 98.993.

Dollar selling by exporters (known as "nego" deals) and net buying of domestic stocks by foreign investors have also contributed to the weaker exchange rate. On this day, foreign investors were net buyers of KRW 479.3 billion in the domestic securities market, marking a buying trend for the second consecutive trading day.

Moon Jeonghee, Chief Economist at KB Kookmin Bank, commented, "The supply of dollars into Korea is continuing, and the current account surplus has increased significantly compared to previous years, maintaining a supply-driven market." She added, "Expectations that the dollar will not strengthen further are growing, due to factors such as the strong yen and a weakening prospect for further Federal Reserve rate hikes."

Chief Economist Moon further predicted, "If the rate falls below 1,350 won, the expected exchange rate range will also change," and added, "As the undervaluation of the won diminishes substantially, theoretical aspects like the Korea-U.S. interest rate differential, current account, and real effective exchange rate will become more important than the dollar supply and demand going forward."

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