The won-dollar exchange rate, which had exceeded 1,390 won for two consecutive days, closed lower at the 1,380 won range. The weakening of the dollar, along with foreign investors net buying stocks in the market late in the session, contributed to this.
On the 21st, the closing price of the won-dollar exchange rate in the Seoul foreign exchange market recorded 1,388.2 won, down 4.8 won from the previous trading day. This marks the first time the exchange rate has closed in the 1,380 won range since the 16th (1,385.70 won).
The exchange rate started at 1,392.1 won, down 0.9 won in the early session, fluctuating in the 1,390 won range before dropping to the 1,380 won range just before the market closed.
Overnight, Christopher Waller, a member of the Federal Reserve, emphasized the need for a rate cut in July, leading to a decline in the dollar's value. A rate cut reduces interest income on investments in U.S. assets (Government Bonds, deposits, etc.), thus decreasing the demand for dollars.
The dollar index (DXY), which shows the value of the dollar against six major currencies, recorded a drop of 0.24% to 98.306 compared to the previous trading day. Considering that it had risen to 98.95 during trading on the 17th, it is showing weakness.
The inflow of foreign buying in the domestic stock market also contributed to the drop in the exchange rate. Foreigners net purchased about 893.4 billion won worth of securities on this day. Thanks to this trend, the KOSPI closed at 3,210.81, up 22.74 points (0.71%) from the previous trading day.
Lee Jae-hyun, an economist at NH Futures, noted, "With Waller's comments constraining the upside of the dollar, the rise in the won-dollar exchange rate is expected to be limited," adding that "the demand for currency exchange from exporters will also serve as a factor forming an upper limit in terms of supply and demand."