The won-dollar exchange rate soared to just below 1400 won due to the strength of the dollar and adjustments in the Nasdaq index.
On the 20th, the weekly closing price of the won-dollar exchange rate in the Seoul foreign exchange market (based on 3:30 p.m.) recorded 1,398.4 won, up 7.5 won from the previous day. The exchange rate started at 1,393.5 won, up 2.6 won from the previous day, rose to 1,399.8 won, and then reduced its gains before closing for the week.
Last night, the Nasdaq Composite Index in the United States fell sharply by 1.46%, resulting in an increase in global risk-aversion sentiment. Expectations that Jerome Powell, the Chair of the Federal Reserve (Fed), may express a more hawkish stance than expected at the Jackson Hole Economic Symposium on the 22nd (local time), also influenced the decline in the New York stock market.
As investors increased purchases of the safe-haven dollar, the value of the dollar is on the rise. The dollar index, which shows the value of the dollar against six major currencies, recorded 98.346, up 0.2% from the previous day.
In the domestic stock market, foreign investors sold stocks for four consecutive days, contributing to the rise in the exchange rate. The KOSPI closed at 3,130.09, down 21.47 points (0.68%) from the previous session, and foreign investors sold a net 232.4 billion won.
Wi Jae-hyun, an economist at NH Futures, noted, "Despite the absence of significant economic indicators, global asset markets have highlighted risk-averse sentiment," adding that, "While demand for assets such as U.S. bonds and the dollar increased, tech stocks faced substantial declines due to profit-taking volumes."
He mentioned, "This is presumed to be the result of the spread of risk-off sentiment related to the Jackson Hole meeting and technical corrections," noting that, "If this psychological contraction continues, emerging market currencies are expected to face downward pressure concurrently."