Risk appetite recovery...KRW-USD exchange rate drops to 1430 level after 4 weeks [Hankyung FX Market Watch]

The KRW-USD exchange rate has dropped to the 1430 level as risk appetite recovers. This is believed to be influenced by factors including the possibility of an end to the war between Ukraine and Russia.

On the 19th, the KRW-USD exchange rate (as of 3:30 PM) in the Seoul foreign exchange market closed weekly trading at 1438.50 won, down 5.20 won from the previous day. This is the first time the exchange rate has fallen below 1440 won at closing since last month's 1431.30 on the 24th. The exchange rate opened at 1442 won, down 1.70 won, and gradually expanded its decline. It fell to as low as 1438.20 won around 1:12 PM.

The decline in the exchange rate is attributed to recovered investment sentiment due to risk appetite. The KOSPI index closing at 2671.52, up 44.71 points (1.7%) from the previous day, was cited as a factor in the exchange rate decline. Foreign investors led the index rise with net purchases of 392 billion won.

The recovery in risk appetite due to expectations of an end to the Ukraine war was also cited as a factor in dollar weakness. Overnight, U.S. President Donald Trump indicated the possibility of a summit meeting with Russian President Vladimir Putin within this month.

The Dollar Index, which shows the value of the dollar against six major currencies, recorded 106.897 as of 3:30 PM. It had been above 107 until the morning before turning downward.

At the same time, the KRW-JPY cross rate recorded 948.85 won per 100 yen. This is down 0.98 won from the previous day's 3:30 PM reference rate of 949.83 won. The JPY-USD exchange rate is 151.60 yen per dollar, down 0.27% from the previous day.

Reporter Jinkyu Kang josep@hankyung.com