On the 13th, the won-dollar exchange rate jumped right after the open and broke through 1,470 won intraday. It was the first time in seven months. A weaker yen and debate over U.S. tech stocks being overvalued combined to weaken the won.
In the Seoul foreign exchange market that day, the won-dollar exchange rate opened at 1,469.0 won, up 3.3 won from the prior session's off-hours transaction closing price (3:30 p.m.). Expanding gains just after the open, it surged to as high as 1,475.2 won at 10:30 a.m. It was the first time the intraday rate topped 1,470 won since on Apr. 9 (1,487.6 won on a high basis).
The yen weakness that had lifted the won-dollar rate the previous day continued. As of 10:17 a.m., the dollar-yen rate was 154.99 yen, nearing the psychological resistance level of 155 yen. The yen is weakening after Sanae Takaichi, Japan's prime minister, signaled she would pursue economic stimulus for currency easing.
Mounting debate in the United States over overvalued tech stocks is dampening foreign investor sentiment, fueling the rise in the exchange rate. According to the Korea Exchange (KRX), foreigners sold 61.8 billion won just after the main board opened that day. As a result, the KOSPI opened at 4,127.57 at 10:11 a.m., down 0.55% (22.82 points) from the previous session.
Michael Burry, the model for the film "The Big Short," who predicted the 2008 global financial crisis, recently targeted core companies at the center of the AI boom, saying "U.S. technology corporations are understating depreciation expense to artificially inflate profits." Since then, risk appetite has weakened in the United States and worldwide.
However, the growing likelihood that the U.S. federal government shutdown (temporary work stoppage) will end is expected to limit the rise in the exchange rate. The U.S. stopgap spending bill that passed the Senate on the 10th will be put to a vote in the House that day. If it passes the House as well, risk appetite could recover and foreigners could resume net buying of funds in Korea's stock market.
Wi Jae-hyeon, an economist at NH Futures, said, "Today, the won-dollar rate is expected to fluctuate in the high 1,460-won range while watching whether risk appetite recovers following the shutdown's end," adding, "However, weakened market sentiment toward AI and semiconductors and increased volatility in Korea's financial markets remain factors pushing the rate higher."