Despite the United States imposing mutual tariffs, the won-dollar exchange rate rose slightly compared to the previous day. This is due to the tariff level exceeding market expectations, raising concerns about stagflation in the U.S.
According to the Seoul foreign exchange market on the 3rd, the weekly closing price of the won-dollar exchange rate (as of 3:30 p.m.) recorded 1,467 won, an increase of 0.4 won compared to the previous trading day. This marks the second consecutive day in the 1,460 won range, following the previous day’s 1,466.6 won.
On this day, the exchange rate opened at 1,471 won, up 4.4 won from the previous trading day, following President Donald Trump's announcement of mutual tariffs, which took place at 5 a.m. Korean time. The dollar showed strength at the start of the trading session, peaking at 1,472 won at 9:01 a.m.
The U.S. government announced an executive order imposing a basic tariff of 10% on all trading countries, along with additional mutual tariffs on countries with significant trade surpluses. Accordingly, South Korea will face a mutual tariff of 25%, Japan 24%, China 34%, and the European Union (EU) 20%.
However, the upward trend in the exchange rate could not be sustained. The exchange rate decreased to 1,469.9 won at 9:32 a.m. and further fell to 1,464.4 won by 10:13 a.m. After that, it stabilized around 1,466 won before closing at around 1,467 won.
The reversal in the exchange rate occurred because the dollar weakened. Kim Yu-mi, an economist at Kiwoom Securities, noted, “The unexpectedly high tariffs raised concerns that the global economy and U.S. growth could decline, contributing to dollar weakness.” However, she added, “Considering the preference for safe assets in the financial market due to the tariffs, overall, upward pressure on the exchange rate prevailed.”
According to Investing.com, the Dollar Index (DXY), which shows the value of the dollar against six major currencies, was recorded at 102.49 as of 4:06 p.m., falling below 102 for the first time since October of last year. The dollar-yen exchange rate hit 146 yen during the day, while the dollar-euro exchange rate stood at 0.91 euros, marking the lowest level so far this year.