The won-dollar exchange rate fell more than 16 won due to poor U.S. employment data, coming down to the 1300 won level.
On the 4th, the weekly closing transaction price of the won-dollar exchange rate in the Seoul foreign exchange market (as of 3:30 p.m.) recorded a drop of 16.2 won from the previous trading day, marking 1385.2 won. This decline was the largest in over a month since June 24, when Israel and Iran had a ceasefire (-24.1 won).
The exchange rate started at 1390.0 won, down 11.4 won from the previous trading day, and fell further during the day to 1382.5 won. However, it rebounded later, closing at around 1385 won.
The sharp drop in the exchange rate was due to poor U.S. employment data. According to the U.S. Department of Labor on the 1st (local time), non-farm employment in July increased by only 73,000 jobs compared to the previous month. This figure is significantly lower than the Dow Jones consensus market estimate of 100,000.
Expectations for interest rate cuts by the Federal Reserve (Fed) have grown due to the poor employment data. On this day, according to the Chicago Mercantile Exchange (CME) FedWatch, participants in the U.S. federal funds futures market see an 81.7% chance that the Fed will cut rates at the September Federal Open Market Committee (FOMC) meeting. This is a significant increase compared to the previous week (63.1%).
The U.S. dollar is showing weakness against major currencies. The Dollar Index (DXY), which reflects the value of the dollar against six major currencies, recorded a drop of 1.1% to 98.851 compared to the previous trading day.
Wi Jae-hyun, an economist at NH Futures, noted, "The dollar index has given back about half of its recent gains due to the shock of U.S. employment data. Since mid-July, the dollar has rebounded based on strong inflation and economic indicators, and the employment shock could serve as a catalyst for a further reversal into a weaker dollar environment."