Won-Dollar Exchange Rate Hits 1,420 Level During the Day...Lowest in 45 Days
- The won-dollar exchange rate hit its lowest in 45 days, indicating a continued weakness of the dollar.
- It was stated that the weakness of the dollar was driven by poor U.S. economic indicators and the yen's strength due to Japan's interest rate hike.
- There is analysis suggesting that the value of the won could appreciate as domestic political uncertainty eases.
- 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.
Impact of Weak U.S. Economic Indicators
Domestic Political Uncertainty Also Eases
The won-dollar exchange rate fell to 1,426 won, the lowest in 45 days. This was influenced by the weakening of the dollar due to poor U.S. economic indicators, while domestic political uncertainty is easing.
According to the Seoul foreign exchange market on the 26th, the won-dollar exchange rate ended night trading at 1,431 won 40 jeon, down 2 won 60 jeon from the previous trading day on the 24th. During weekly trading, the exchange rate fell to 1,431 won 30 jeon and further declined to 1,426 won 20 jeon after the European market opened. This exchange rate is the lowest in 45 days since it was 1,426 won on the 10th of last month, based on the intraday low.
The decline in the exchange rate is due to weak U.S. economic indicators. The January Services Purchasing Managers' Index (PMI) recorded the lowest level in nine months, and the University of Michigan's final January Consumer Sentiment Index was revised down to 71.1, 2.1 points lower than the previously announced preliminary figure of 73.2.
As a result, the dollar index, which represents the value of the dollar against the currencies of six major countries, fell to the early 107 range. The yen's strength, driven by the Bank of Japan's (BOJ) interest rate hike, also contributed to the weak dollar trend. Domestically, it is assessed that political uncertainty is easing as the impeachment trial of President Yoon Suk-yeol is underway.
Major domestic and international institutions believe the won-dollar exchange rate could fall further. Swiss investment bank UBS predicts, "There is a possibility that the value of the won could appreciate by more than 5% as bargain hunting in the KOSPI occurs this year and some political uncertainties are resolved."
Reporter Kang Jin-kyu josep@hankyung.com

Korea Economic Daily

hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.PiCK News
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