The won-dollar exchange rate rose in early trading ahead of the policy rate decisions by the United States Federal Reserve (Fed) and the Bank of Japan (BOJ).

On the 17th, the won-dollar exchange rate in the Seoul foreign exchange market opened at 1,437 won, up 2.0 won from the closing price of the previous day's weekday transaction (as of 3:30 p.m.). The opening price of the exchange rate has been in the 1,430 won range for three trading days since the 13th (1,432 won). The atmosphere suggests a continuation of the weak won trend as the nation enters an impeachment crisis.

The KOSPI index and won-dollar exchange rate are displayed on the electronic board at Hana Bank's main branch dealing room in Jung-gu, Seoul, on the afternoon of the 16th. /Courtesy of News1

Cautious sentiment has heightened ahead of the Federal Open Market Committee (FOMC) meeting in the United States (17-18) and the Bank of Japan's monetary policy meeting (18-19). The U.S. Fed is expected to cut the policy rate by 0.25 percentage points (p), while the Bank of Japan is projected to maintain interest rates.

According to Investing.com, the dollar index, which reflects the value of the U.S. dollar against six major currencies, is at 106.79. This is higher compared to the end of last month when it was at 105. Major currencies, excluding the dollar, are generally weak. The dollar-yen rate is 154.22 yen, the dollar-yuan rate is 7.2898 yuan, and the euro-dollar rate is in the 1.0530 dollar range.

At the same time, the won-yen cross rate is trading at 932.07 won per 100 yen. This represents a decrease of 1.26 won compared to the reference price of the previous day's 3:30 p.m. rate (933.33 won).

Min Kyung-won, a researcher at Woori Bank, noted, “The yen has shown weakness as there is a forecast that the BOJ may not raise interest rates this week, and the yuan is also reflecting China's poor real economic indicators, showing weakness.” Min added, “The won is expected to be under downward pressure in tandem with Asian currencies.”

Wi Jae-hyun, an economist at NH Futures, said, “The revival of the semiconductor stocks centered around Broadcom in the U.S. stock market overnight is a positive factor for the domestic market today,” and added, “Therefore, foreign capital outflow is limited, and downward stability is expected to proceed again due to the resolution of political uncertainty.”