The won-dollar exchange rate soared to 1,470 won during the trading session due to political instability and heightened concerns over the imminent mutual tariff imposition by the U.S. Trump administration.
According to the Seoul foreign exchange market on the 25th, the won-dollar exchange rate recorded 1,470 won around 10:42 a.m. That is a rise of 2.3 won compared to the previous transaction week's closing price (3:30 p.m.) of 1,467.7 won. The exchange rate has continued to maintain a high level, staying in the upper 1,460 won range.
Political instability appears to be fueling the rise in the exchange rate. The previous day, the Constitutional Court held a hearing on the impeachment ruling date for Han Duck-soo, the Prime Minister and Acting President, and dismissed the National Assembly's impeachment motion. Of the eight judges, five expressed dismissal opinions, one suggested an acceptance opinion, and two indicated decisions to dismiss. With differing opinions among the constitutional judges, the uncertainty regarding President Yoon Suk-yeol's impeachment has increased, further deepening the political instability.
Concerns regarding the mutual tariff imposition by the U.S. also had an impact. The Trump administration warned that it would impose mutual tariffs on countries engaged in unfair trade on April 2. International media reports suggest that countries known as the 'Dirty 15,' which run a significant trade surplus with the U.S., could be targeted. The Office of the United States Trade Representative (USTR) mentioned in a federal register notice last month that countries such as South Korea, Japan, China, Australia, Brazil, Canada, the European Union (EU), and Mexico are being referenced as trade imbalance countries.
The dollar, which had been weak for a while, has turned strong. According to Investing.com, the dollar index (DXY), which shows the value of the dollar against six major currencies, recorded 104.29 as of 11:16 a.m. on that day. Compared to a week ago when it had dropped to the early 103 range, it has risen slightly.
Experts forecast that if domestic and international uncertainties are not resolved, the won-dollar exchange rate could rise to the 1,480 won range. Park Soo-yeon, a researcher at MERITZ Securities, noted, "It seems difficult for the won to appreciate as domestic political uncertainties persist," and explained, "It is also not easy to ease concerns over mutual tariff imposition."