On the 10th, the won-dollar exchange rate closed at 1,465 won, marking the second consecutive day in the 1,460 won range. The exchange rate, which had stalled following reports that the new government's tariff policy in the United States might fall short of expectations, is now showing signs of movement again.
On that day, the weekly closing price in the Seoul foreign exchange market was 1,465 won, up 4.5 won from the previous trading day's closing price (as of 3:30 p.m.). The exchange rate opened at 1,461 won, dipped to about 1,457.3 won around 10:06 a.m., and then reversed to rise above 1,460 won.
The exchange rate, which surged to 1,472.5 won on Dec. 30 last year, plummeted following reports that the universal tariff announced by the then President-elect Donald Trump would only be applied to certain key items. It also closed at 1,453.5 won and 1,455 won on the 7th and 8th, respectively, falling to the 1,450 won range.
However, the situation changed when Trump expressed his intention to impose universal tariffs. On the 8th (local time), CNN reported that Trump is considering declaring a "national economic emergency" using the International Emergency Economic Powers Act (IEEPA) to justify the universal tariff that does not discriminate between allies and enemies. Since then, the exchange rate has turned upward again, exceeding 1,460 won for the second consecutive day starting on the 9th (1,460.5 won).
The hawkish remarks from Federal Reserve (Fed) officials also had an impact. Michelle Bowman, a member of the Fed, noted on the 9th (local time) that "the cycle of interest rate cuts ended as of December last year." On the same day, Patrick Harker, president of the Federal Reserve Bank of Philadelphia, also said, "While I expect a decline in interest rates in the future, there is no need to lower them immediately."
In the domestic stock market, foreign investors sold a net 37.1 billion won, exacerbating the rise in the exchange rate. Foreign investors had maintained net buying for five consecutive trading days before turning to net selling. As a result, the KOSPI index finished trading at 2,515.78, down 6.12 points (0.24%) from the previous trading day.
The market is watching the U.S. non-farm payroll figures for December released on the evening of the 10th, Korea time. Wall Street expects that 155,000 jobs were added last month. If the employment figures are hotter than the market's expectations, the Fed's interest rate cuts could slow down, intensifying the strong dollar.
Lee Jae-hyun, an economist at NH Futures, said, "The won-dollar exchange rate is expected to fluctuate in the range of 1,455 to 1,460 won ahead of the U.S. employment figures to be announced in the evening," adding that "the National Pension Service's hedge volume is expected to operate cautiously during the day, establishing an upper boundary around 1,460 to 1,465 won."