The won-dollar exchange rate climbed by nearly 5 won, closing in on 1,400 won. With the dollar strengthening on concerns about Britain's widening fiscal deficit, the U.S. government's push for a $350 billion investment into the United States is also adding upward pressure on the rate.
According to the Seoul foreign exchange market on the 22nd, the won-dollar rate opened at 1,398.5 won, up 4.9 won from the previous transaction day's weekly trading closing price (as of 3:30 p.m.). It is the first time in five transaction days that the rate started in the 1,390-won range since the 15th (1,393.0 won).
The rate started higher, tracking the global strong-dollar trend. According to Investing.com, the dollar index (DXY), which shows the value of the dollar against the currencies of six major countries, was at 97.75 as of 9:17 a.m. This is up 0.11% from the previous day and 0.46% from a week earlier.
Experts say Britain's widening fiscal deficit led to a weaker pound, fueling dollar strength. According to the U.K. Office for National Statistics, Britain's fiscal deficit from April this year to 8th, the first months of the 2025·2026 fiscal year, was 83.8 billion pounds, exceeding the Office for Budget Responsibility's forecast (72.4 billion-pound deficit). This is the largest since the 2020 pandemic (pandemic·global spread).
U.S. pressure for investment into the United States is also adding to the upward pressure on the rate. At the end of Jul., South Korea and the United States reached a verbal agreement to lower reciprocal tariff in exchange for the Korean government creating a $350 billion investment fund into the United States, but the two sides have not narrowed differences over how to structure the investment. The United States is demanding full cash funding, but that equals 84% of Korea's foreign exchange reserves, making it difficult for the government to accept.
Wi Jae-hyeon, an economist at NH Futures, said, "The $350 billion push for investment into the United States is continuously being reflected in the exchange rate," adding, "If there is no active intervention by the authorities and no export companies' negotiation supply, the rate is likely to break through 1,400 won."