Exchange Rate Fluctuates with Tariffs... Drops with US 'Delay', Rebounds with China's 'Retaliation' [Hankyung Forex Market Watch]

The won-dollar exchange rate fell slightly on the 4th (the value of the won rose). The exchange rate, which plummeted due to the weak dollar after U.S. President Donald Trump delayed tariff imposition, rebounded in the afternoon as China announced 'retaliatory tariffs.'

On this day, the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 PM) ended weekly trading at 1,462.90 won, down 4.30 won from the previous day. The exchange rate started at 1,459 won, down 8.20 won. The announcement by the U.S. to delay tariffs on Mexico and Canada led to a weaker dollar. As global risk appetite also recovered, the intraday exchange rate fell to 1,456.50 won.

However, the exchange rate rebounded in the afternoon as U.S. tariffs on China took effect as scheduled. China responded by announcing that from the 10th, it would impose an additional 15% tariff on U.S. coal and LNG, and an additional 10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks, increasing volatility. At one point during the day, the exchange rate rose to 1,466.40 won. The fluctuation range in weekly trading reached 9.90 won.

As the U.S. and China enter a tariff war, market uncertainty is expanding again. The stock market also surged and then gave back a significant portion of the gains. However, there is a possibility of dramatic compromise in future negotiations, as seen in the case with Mexico and Canada.

As of 3:30 PM, the won-yen fiscal exchange rate is 941.56 won per 100 yen. It fell 2.71 won from the previous day's 3:30 PM standard of 944.27 won. The yen-dollar exchange rate rose by 0.01% to 155.350 yen.

Joseph Kang josep@hankyung.com