On the 23rd, the won-dollar exchange rate dropped by 8.0 won due to expectations of trade negotiations with the United States and foreign net purchases of domestic stocks.
On that day, the closing price of the won-dollar exchange rate in the Seoul foreign exchange market (based on 3:30 p.m.) recorded 1,379.8 won, down 8.0 won from the previous trading day. The exchange rate started at 1,381.1 won, down 6.7 won, and fluctuated between the high 1370s and low 1380s.
This is the effect of the won strengthening due to expectations of trade negotiations with the United States. President Donald Trump announced on the 22nd (local time) that he will lower the reciprocal tariff on Japan from 25% to 15%. Prime Minister Shigeru Ishiba also noted, "We have decided to reduce the automobile tariff from the existing total of 27.5% to 15% (including the existing automobile tariff of 2.5%)."
Our government is also making every effort ahead of the date set by the United States for implementing reciprocal tariffs on the 1st of next month. Deputy Prime Minister and Minister of Economy and Finance Yeo Han-koo and Minister Yeo Han-koo, the head of the trade negotiation headquarters, will engage in a 2+2 trade consultation in Washington, D.C., on the 25th. From the U.S. side, Treasury Secretary Scott Bessent and Jamieson Greer, the U.S. Trade Representative (USTR), are expected to participate as negotiation representatives.
Domestically, foreign investors contributed to the decline in the exchange rate by net purchasing domestic stocks. On that day, foreign investors purchased stocks worth 316.1 billion won, while institutions net bought stocks worth 292.3 billion won. Supported by foreign buying, the KOSPI closed at 3,183.77, up 13.83 points (0.44%) from the previous trading day.
Woo Jae-hyun, an economist at NH Futures, said, "While uncertainty remains ahead of the effective date of the reciprocal tariff on August 1, the dollar is showing weakness as expectations grow that the U.S. and China will postpone tariffs in next week's trade negotiations." He also noted that "the news that the United States has concluded a trade agreement with the Philippines may also contribute to the recovery of risk appetite and could lead to downward pressure on the exchange rate."