As domestic political uncertainty eased, the exchange rate, which had plummeted by more than 30 won, surged again to the 1460 won range. This was due to the escalation of the global tariff war triggered by the mutual imposition of tariffs by the United States. The Korean won showed further weakness as foreign investors continued to sell in the domestic stock market.
On the 7th in the Seoul foreign exchange market, the won-dollar exchange rate opened at 1462 won, up 27.9 won from the previous transaction's weekly closing price (based on 3:30 p.m.). This was the first time the exchange rate exceeded 1460 won since the 3rd (1471 won) in two trading days. Afterward, the exchange rate widened its increase, rising to 1471.3 won as of 9:31 a.m.
On the 4th, the exchange rate recorded 1434.1 won, down 32.9 won from the previous transaction's weekly closing price. This was influenced by the Constitutional Court's ruling on the impeachment of former President Yoon Suk-yeol, which alleviated domestic political uncertainty. During the trading day, it fell to 1430.9 won, attempting to enter the 1420 won range.
However, as concerns over the global tariff war intensified, risk-averse sentiment increased. China recently announced a 34% tariff on U.S. imports in retaliation for the mutual imposition of tariffs by the United States. At the same time, it implemented additional sanctions, including export controls on seven rare earth elements and an anti-dumping investigation into CT X-ray tubes from the U.S. and India.
In the domestic stock market, foreign investors sold shares, contributing to the weakness of the won. The Korea Composite Stock Price Index (KOSPI) started trading at 2359.25, down 4.31% from the previous transaction. The decline continued, triggering a sidecar that halted program selling orders for five minutes at 9:12 a.m., influenced by KOSPI 200 futures falling (more than 5% for over a minute).
The dollar value is rising again. According to Investing.com, the dollar index (DXY), which reflects the dollar value against major currencies of six countries, was recorded at 102.78 as of 9:35 a.m. The index had fallen to 101.27 on the 3rd when concerns about a U.S. recession were raised due to the mutual imposition of tariffs, but it rose by over a point in two trading days as the U.S. job market showed improvement.
Wi Jae-hyun, an economist at NH Futures, noted, "Korea is heavily reliant on exports to both the U.S. and China, and April seasonally has foreign corporations paying dividends, which may increase demand for dollars," adding, "The factors for rising exchange rates are becoming more pronounced."
Min Kyung-won, a researcher at Woori Bank, analyzed, "Although domestic political uncertainty has eased, the concerns of the tariff war are deepening, and foreign net selling in the domestic stock market is expected to increase today," stating, "A weak won sentiment is likely to form."
Meanwhile, the won-yen exchange rate rose to 1007.69 won per 100 yen, marking the highest level since 2023. This was due to demand shifting towards the yen, a safe asset, amid fears of a global economic downturn. The won-yen exchange rate has gradually increased since last year's Bank of Japan (BOJ) interest rate hike.