The won-dollar exchange rate rose to the upper 1,450-won range on the 7th on the back of net selling by foreigners in the domestic stock market.
On this day in the Seoul foreign exchange market, the won-dollar rate finished weekly trading at 1,456.9 won, up 9.2 won from the previous day. Based on the weekly trading closing price (3:30 p.m.), it was the highest in about seven months since on Apr. 9 (1,484.1 won), a record high.
The rate opened at 1,448.1 won, 0.4 won higher than the previous session, then extended gains to surge to as high as 1,458.5 won intraday. On an intraday high basis (including overnight trading), it was the highest since on Apr. 10 (1,465.7 won).
Foreigners have continued net selling in the domestic stock market for a fifth session, increasing upward pressure on the rate. Foreign investors posted a net sale of 471.6 billion won in the Korea Exchange on the day. As a result, the Korea Composite Stock Price Index (KOSPI) closed at 3,953.76, down 72.69 points (1.81%) from the previous session, surrendering the 4,000 mark for the first time in 10 sessions.
A global weaker dollar also failed to stop the rate from rising. The dollar has been soft as weak U.S. employment data revived expectations for a Federal Reserve (Fed) rate cut. The dollar index, which shows the dollar's value against six major currencies, stood at 99.856, down 0.17% from the previous day.
The market sees renewed U.S.-China tensions over exports of artificial intelligence (AI) semiconductors as having increased pressure on the won to weaken. According to major foreign media, the U.S. administration, after tightening export controls on advanced AI Semiconductor chips, has moved to implement measures to restrict exports to China even of relatively lower-spec chips for AI and Machine Learning.
Wi Jae-hyeon, an economist at NH Futures, said, "If foreign investors' dumping of domestic stocks continues, the won-dollar rate will continue to face upward pressure, driven by supply-demand burdens rather than by dollar weakness."