On the 25th, the won started in the 1,475 range against the U.S. dollar, down by nearly 2 won. The move reflected a mix of expectations for Federal Reserve interest rate cuts and caution over possible intervention by foreign exchange authorities.
In the Seoul foreign exchange market, the won-dollar rate opened at 1,475.2 won, down 1.9 won from the prior session's weekly transaction closing price of 1,477.1 won at 3:30 p.m. It was 1.3 won lower than the 2 a.m. close of 1,476.5 won the same day.
Overnight, Federal Reserve Governor Christopher Waller said in an interview with Fox Business Network that he supports a rate cut in December, easing dollar strength. Mary Daly, president of the Federal Reserve Bank of San Francisco, known as a close confidant of Fed Chair Jerome Powell, also added weight by publicly arguing the need for rate cuts in an interview with the Wall Street Journal (WSJ).
Caution over intervention by foreign exchange authorities also pushed the rate lower. The previous day, the Ministry of Economy and Finance, the Bank of Korea (BOK), the Ministry of Health and Welfare, and the National Pension Service said they would launch a four-party consultative body to stabilize the foreign exchange market. As a result, the market expects that measures could include actual intervention by the authorities, as well as ▲ increasing the National Pension Service's FX-hedging ratio ▲ easing conditions for strategic FX hedging ▲ expanding and extending the BOK–National Pension Service FX swap.
Wi Jae-hyeon, an economist at NH Futures, said, "Today's rate is expected to fall to the low 1,470s on a revival in risk appetite," adding, "If intraday foreign capital turns to active net buying on strengthened expectations for rate cuts, downward pressure on the rate will hold."