As U.S.-China trade tensions reignited and risk-off sentiment strengthened, the won-dollar exchange rate opened at 1,430 won on the 13th. It is the highest in five months.
According to the Seoul foreign exchange market, the won-dollar exchange rate opened at 1,430 won, up 9 won from the prior session's weekly transaction closing price (3:30 p.m.). It is the first time in five months that the rate has started in the 1,430-won range since May 2 (1,436 won).
Amid U.S.-China tensions, the exchange rate is on an unabated rise. U.S. President Donald Trump, protesting China's rare earth export controls, warned that he would impose an additional 100% tariff on China starting on the 1st of next month, dampening risk appetite.
The dollar is strong. According to Investing.com, the U.S. dollar index (DXY), which shows the dollar's value against six major currencies, is at 99.03. It is up 0.05% from the prior session and 0.95% from a week ago.
The domestic stock market is falling. The Korea Composite Stock Price Index (KOSPI) opened at 3,550.08, down 60.52 points (1.68%) from the previous session. During the session, it slid to as low as 3,522.54, down 2.44% from the previous day. Foreign investors are dragging the index down with a net sell of 219.6 billion won.
Min Kyung-won, a Woori Bank researcher, said, "Today, the won-dollar exchange rate is expected to hit a new high for the second half, influenced by Asian currency weakness due to renewed concerns over the U.S.-China trade war and damaged risk-on sentiment," adding, "In the case of the won, it is highly sensitive to the trade war and weakening risk appetite, so depreciation pressure will increase."
However, the researcher noted, "High-level selling by exporters and heavy industry companies will support the upper bound," forecasting, "Although upward pressure will prevail on net foreign selling in the stock market and inflows of onshore and offshore chase buying, some of it will be offset by export settlements, and the market will attempt additional intraday gains centered on the low 1,430-won level."