The won-dollar exchange rate is on the verge of reaching 1,460 won, having risen for four consecutive trading days. As the dollar continues to strengthen, political uncertainty in our country is increasing, and the value of the won is declining.
On the 24th, the won-dollar exchange rate weekly closing price (as of 3:30 p.m.) on the Seoul foreign exchange market recorded 1,456.4 won, up 4.4 won from the previous day. This is the highest level in 15 years since March 13, 2009, during the global financial crisis, when it was 1,483.5 won.
The won-dollar exchange rate surpassed 1,450 won on the 19th, when the U.S. Federal Reserve (Fed) hinted at adjusting its rate cut pace, and the upward trend has continued since. According to Seoul Money Brokerage, it surpassed 1,450 won for four consecutive trading days from the 19th to the 24th.
Although the overnight U.S. consumer sentiment indicators showed weakness, it did not stop the dollar's strength. The U.S. consumer confidence index for December, announced by the Nonprofit Institutions (NPI) known as the Conference Board (CB), was 104.7, down 8.1 points from November, falling short of market expectations of 113. It was the first decline in three months.
The dollar index, which reflects the value of the dollar against the currencies of six major countries, rose from the mid-107s the previous day to the 108 range today. In contrast, Asian currencies are continuing to weaken. The dollar-yuan rate exceeded 7.3 yuan, soaring to its highest level since September last year, and the dollar-yen rate surpassed 157 yen for the first time since July this year.
Unstable domestic politics are also fueling the rise in the exchange rate. According to the financial sector, the amount converted from dollars to won (cash basis) by customers at the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was $213 million from the 1st to the 20th. The average daily conversion amount surpassed $10 million for the first time since August last year.
Lee Min-hyuk, a researcher at KB Kookmin Bank, noted, “Despite the weakness in U.S. consumer sentiment, the impact of the Federal Open Market Committee (FOMC) is continuing, leading to the strengthening of the dollar. The deterioration of domestic consumer sentiment due to the Korean martial law is also a factor in the weakness of the won.”