Weak Dollar and Exporter Dollar Selling Drive Exchange Rate to 1,330 Won Range for First Time in 23 Months (Update)

Weekly Trading Closes in the 1,330 Won Range for the First Time Since October 2024
Dollar Weakness Highlighted Amid Yen Strength
Ongoing Dollar Selling by Exporters Continues to Affect Market

Despite rising international oil prices due to heightened risks in the Middle East, the KRW-USD exchange rate finished the week in the 1,330 won range for the first time in about 23 months.

On the 8th, employees are monitoring the stock market and exchange rates at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Yonhap News

On September 9 at the Seoul foreign exchange market, the KRW-USD exchange rate closed at 1,336.1 won as of 3:30 p.m., down 9.5 won from the previous trading day. This is the first time since October 4, 2024 (1,333.7 won) that the weekly closing exchange rate has entered the 1,330 won range.

On this day, the exchange rate remained in the 1,340 won range until the morning but dropped to 1,335.0 won around 3:05 p.m. Based on the intraday high, it marked its fifth consecutive day of decline. Compared to the recent peak on July 2 (1,555.8 won) for the weekly closing, it has fallen by 219.7 won in just over two months.

This is the result of sustained and consistent dollar selling by exporters—including semiconductor companies—due to increased exports. The strengthening of the Japanese yen, which has led to relative weakness in the U.S. dollar, is also contributing to the recent downward trend in the exchange rate.

Notably, the downward trend persisted even as upward pressure on the exchange rate remained high on this day, with international oil prices nearing 100 dollars per barrel due to instability in the Middle East. Additional factors, such as payments by importers needing to send remittances in the middle of the month and increased demand for overseas stock investment by domestic investors, could have nudged the exchange rate higher. However, the supply of dollars from exporters and the overall weakness of the U.S. dollar have exerted a stronger downward force on the rate.

As of 3:30 p.m., the U.S. Dollar Index, which measures the value of the dollar against the currencies of six major nations, stood at 98.669, down 0.185 from the previous day. The exchange rate for the Japanese yen against the U.S. dollar was 153.206 yen, down 0.46%, with the rate dropping below 153 yen during the session, further highlighting the yen’s strength.

Lim Hwanyul, a researcher at Woori Bank, said, "The most significant factor appears to be that dollar weakness relative to yen strength is sustaining short positions (bets on price declines) in the KRW-USD exchange rate. In addition, consistent dollar selling from exporters is also playing a role in market supply and demand."

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