The won-dollar exchange rate opened at 1,475 won. Amid the continued strong dollar pressure and unresolved domestic political uncertainty, it reached its highest level in 15 years and 9 months based on the opening price.
On the 30th in the Seoul foreign exchange market, the won-dollar exchange rate started at 1,475 won, up 7.5 won from the previous day's week-day transaction closing price (3:30 p.m.) of 1,467.5 won. It is the highest rate since March 16, 2009 (1,488.0 won) based on the opening price.
On the 19th (local time), the U.S. Federal Open Market Committee (FOMC) raised next year's interest rate level from 3.4% to 3.9%, causing the dollar value to surge. As a result, the exchange rate exceeded 1,450 won for seven consecutive transaction days since the 19th. On the 27th, the won-dollar exchange rate soared to 1,486.7 won, approaching 1,490 won.
Domestic political uncertainty is also fueling the rise in the exchange rate. Acting Representative Han Duk-soo rejected the appointment of a Constitutional Judge, and with the opposition passing an impeachment motion against Acting Representative Han, political instability is expanding. The role of acting representative has currently passed to Choi Sang-mok, Deputy Prime Minister and Minister of the Ministry of Strategy and Finance.
The market views that the continued political instability and the strong dollar pressure necessitate leaving the upper limit open to 1,480 won. Considering the rise in U.S. Government Bonds yields, it is anticipated that the strong dollar trend will continue. However, the foreign exchange authorities' micro-adjustment vigilance and the influx of end-of-month negotiations from export companies are expected to limit the rise in exchange rates.
Min Kyung-won, a researcher at Woori Bank Research Institute, noted, "In a situation where the exchange rate is highly volatile and sensitive to domestic political issues, we judge that upward pressure on the exchange rate will prevail today. However, actions by authorities to alleviate anxiety caused by the rapid rise in exchange rates are being observed in the market, and the micro-adjustment burden to control the rate of additional rises in the foreign exchange market is expected to prevent excessive buying sentiment."
Wi Jae-hyun, a researcher at NH Futures Research Institute, predicted that today's exchange rate would move between 1,470 and 1,478 won, explaining, "Considering the thin quotations due to reduced year-end transaction volume and the non-significant release of negotiation volumes from export companies, the supply-demand burden remains." However, Wi stated, "Authorities' intervention volumes and investor caution against a rapid exchange rate increase support the upper limit."