The won-dollar exchange rate started at 1,439 won, threatening the 1,440 won mark. It seems the value of the won has dropped due to ongoing caution surrounding the U.S. Federal Reserve (Fed) interest rate decision, garnering attention along with currency policies of major countries such as Japan and the United Kingdom.
According to the Seoul foreign exchange market on the 18th, the won-dollar exchange rate opened at 1,439 won, up 0.1 won from the previous day's session closing price (based on 3:30 p.m.). The exchange rate has been starting in the 1,430 won range for four consecutive trading days since the 13th (1,432 won).
In the foreign exchange market, attention is focused on the results of the U.S. Federal Open Market Committee (FOMC), set to be announced tomorrow. There is speculation that the dollar will remain strong, as the Fed may indicate a hawkish outlook that suggests a rate freeze next year, even if rates are lowered at this meeting.
The interest rate decisions from the Bank of Japan (BOJ) and the Bank of England (BOE), set to be announced the same day, are also of interest. The market anticipates that both the BOJ and BOE will freeze rates at this meeting. The BOJ raised its benchmark rate from 0%–0.1% to 0.25% in its July meeting and has maintained it since. The BOE cut the rate by 0.25 percentage points in August and reduced it by another 0.25 percentage points last month.
Reflecting this, the value of the dollar has shifted upward. According to Investing.com, the dollar index, which represents the value of the dollar compared to six major currencies, stood at 106.94 as of 8:04 a.m. This is a high level compared to the mid-106s on the 11th a week ago.
Excluding the dollar, the value of major currencies is falling. The dollar-yen exchange rate is in the 153.7 yen range, while the dollar-yuan exchange rate is at 7.2872 yuan. On the 11th a week ago, these rates were 151.97 yen and 7.2482 yuan, respectively. The euro-dollar exchange rate fell from $1.0528 to $1.0501 over the same period.
Experts predict that the exchange rate will remain high for the time being. Min Kyung-won, a researcher at Woori Bank Research Institute, noted, "Today's exchange rate is expected to flow around the high end of the 1,430 won range, with upward pressure due to the global strong dollar and foreign capital outflow," adding, "Concerns about the influx of export companies' hedge volumes after confirming the high point will act as a factor limiting the top end of the exchange rate."
Wi Jae-hyun, an economist at NH Futures, said, "The won-dollar exchange rate is expected to fluctuate in the mid-1,430 won range, maintaining a cautious stance in line with foreign stock market funds," and added, "Considering that interest rate decisions from the FOMC, the Bank of Japan (BOJ), and the Bank of England (BOE) are all due tomorrow, major movements in today's exchange rate are expected to be restrained."