Won-Dollar Rate Reverses 19 Won in a Day...Eases "Warsh Shock" to Close in 1,440-Won Range (Update)

The won-dollar exchange rate, which had surged by nearly 25 won in a single day, reversed most of the gains on the 3rd and closed lower in the 1,440-won range. This was the result of a strong performance in the New York stock market as the "Warsh shock," which had shaken the stock and foreign exchange markets the previous day, showed signs of easing.

On the 3rd, the won-dollar exchange rate is displayed on the display board in the dealing room of KB Kookmin Bank in Yeouido, Seoul. Provided by KB Kookmin Bank.

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In the Seoul foreign exchange market on this day, the weekly closing price (as of 3:30 p.m.) of the won-dollar exchange rate was 1,445.4 won, down 18.9 won from the previous trading day. After surpassing 1,460 won for the first time in six trading days the previous day, it returned to the 1,440-won level in just one day.

The exchange rate opened at 1,452.0 won, down 12.3 won from the previous trading day, and extended its decline to the mid-to-upper 1,440-won range.

This was due to the stabilization of the global financial market, which had been shaken by the nomination of Kevin Warsh as the successor to the U.S. Federal Reserve (Fed) Chair, whose term expires in May. Overnight, the manufacturing Purchasing Managers' Index (PMI) released by the Institute for Supply Management in the United States came in at 52.6, significantly beating market expectations and boosting hopes for an economic upturn, which in turn supported a strong New York stock market. As a result, the Dow Jones Industrial Average rose 1.05%, the Standard & Poor's (S&P) 500 Index gained 0.54%, and the Nasdaq Composite Index climbed 0.56%, respectively, at the close.

The dollar index (DXY), which measures the value of the U.S. dollar against the currencies of six major countries, also continued to trade around 97.43, down 0.2% from the previous day. In the domestic KOSPI market, net purchases of 716.4 billion won by foreign investors on this day also contributed to the strengthening of the won.

The yen-dollar exchange rate, which tends to move in tandem with the won, was recorded at 155.394 yen, down 0.186 yen.

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