On the 1st, the won opened at 1,467 won against the U.S. dollar, down more than 3 won from the prior trading day. With New York stocks rising led by tech shares, risk appetite improved, and Korea's foreign exchange authorities signaling market-stabilizing steps also helped push the rate lower, according to assessments.
In the Seoul foreign exchange market that day, the dollar-won rate opened at 1,467 won, down 3.6 won from the prior trading day. It widened its decline right after the open to as low as 1,466.2 won, then inched back up to 1,467.1 won as of 9:24 a.m.
The drop in the rate largely reflected improved risk appetite on gains in U.S. stocks. On the 28th (local time), the Dow Jones 30 index finished trading at 47,716.42, up 289.30 points (0.61%) from the prior session. The Standard & Poor's (S&P) 500 index closed at 6,849.09, up 36.48 points (0.54%), and the Nasdaq composite closed at 23,365.69, up 151.00 points (0.65%), respectively.
The government's notice of market-stabilizing measures also weighed on the rate. In a text message sent to the media on the 1st, the government said, "On Sunday (Nov. 30), the Ministry of Economy and Finance (MOEF), the Ministry of Health and Welfare, the Ministry of Trade and Industry (MOTI), the Financial Services Commission (FSC), the Bank of Korea, and the Financial Supervisory Service (FSS) reviewed structural conditions in the foreign exchange market," adding, "We decided to swiftly advance policy tasks to stabilize foreign exchange supply and demand."
On the 24th, the government held a four-party consultative meeting on exchange-rate measures with the Ministry of Economy and Finance (MOEF), the Bank of Korea (BOK), the National Pension Service, and the Ministry of Health and Welfare. With an interagency meeting convened again six days after the previous gathering, the market sees the government as raising its level of response on the exchange rate by one notch.
Min Kyung-won, a Woori Bank researcher, said, "Today's rate is expected to fall on the back of improved risk appetite for U.S. growth stocks, caution over authorities' intervention around the 1,470-won level, and exporters selling at highs," adding, "Foreign investors' sentiment toward won-denominated risk assets is also expected to improve."