On the 9th, the won-dollar exchange rate started at 1,484 won, marking the highest level since March 2009 during the global financial crisis. This was influenced by the sharp drop in the value of the yuan, which has a high correlation with the won, as the tariff war between the United States and China intensified.
On this day, the won-dollar exchange rate in the Seoul foreign exchange market opened at 1,484 won, up 10.8 won from the previous trading day's weekly closing price (as of 3:30 p.m.). This is the first time the exchange rate has recorded the 1,480 won range since March 16, 2009 (1,488.0 won), over 16 years.
The exchange rate continued to rise shortly after the market opened, exceeding 1,487 won. Based on the intraday high, it surpassed the 1,486.7 won recorded on December 27 of last year after three months.
Overnight, the White House noted that China would not withdraw its retaliatory tariffs and announced it would impose a 104% tariff on China starting on the 9th (local time). This includes the 20% tariff imposed on Chinese imports right after the Trump administration took office and the 34% mutual tariff and an additional 50% tariff that will take effect from the 9th.
As a result, the offshore dollar-yuan exchange rate surpassed 7.42 yuan the previous day, setting a new record high. As the value of the yuan declined, the won also showed weakness as it correlated with the yuan. Typically, the won moves in the same direction as the yuan and is referred to as the "proxy" currency for the yuan.
The Dollar Index (DXY), which shows the dollar's value against six major currencies, recorded 102.59 as of 9:42 a.m. on the same day, falling from the previous day (103). In contrast, the values of the euro and yen are rising. The euro-dollar exchange rate is at $1.10, while the dollar-yen exchange rate is in the 145 yen range.
Min Kyung-won, an economist at Woori Bank, said, "The won, which has the proxy characteristics of the yuan, is in the worst situation," adding, "Today, the domestic stock market is expected to see a larger drop due to continued foreign net selling, and there is a high possibility that betting on the weakness of the yuan proxy currency will concentrate in the offshore market, so one should be cautious of increasing upward volatility."
Wi Jae-hyun, an economist at NH Futures, said, "If Chinese authorities significantly depreciate the yuan and suggest a currency war, an additional rise in the won during intraday trading is inevitable," adding, "The risk currency won is likely to be under additional downward pressure linked to the yuan, facing overlapping adverse conditions."