On the 15th, the won rose more than 2 won against the U.S. dollar at the open, starting in the 1,470-won range. It is the highest level in eight months since April.
According to the Seoul foreign exchange market that day, the won-dollar exchange rate opened at 1,476 won, up 2.3 won from the prior session's (the 12th) weekly transaction closing price (as of 3:30 p.m.). It is the highest level since Apr. 9 (1,484 won, opening price).
The rise in the exchange rate is because foreigners sold stocks in the domestic stock market. When foreigners sell Korean stocks, demand arises to convert won into dollars, which becomes a factor pushing the exchange rate higher. As of 9:05 a.m. that day, foreigners recorded a net sell of 202.3 billion won in the Korea Exchange. As a result, the Korea Composite Stock Price Index (KOSPI) opened at 4,053.74, down 2.72% from the previous session.
In the U.S. stock market, the "artificial intelligence (AI) bubble theory" sparked by IT giant Oracle spread, and the Nasdaq closed lower, affecting the domestic market as well. Oracle's stock had risen sharply as an AI-related name. However, with Oracle's earnings announcement for September to November as a catalyst, observations emerged that the company spent too much money on data center investment and that even the groundbreaking of centers it had planned to build was delayed, making it difficult for investors to recoup their capital on time.
According to the earnings Oracle released on the 10th (local time), capital expenditure representing data center spending for September to November came to $12 billion, up $3.5 billion from the previous quarter. That was $3.7 billion above market expectations. Then on the 11th, Bloomberg reported that completion of Oracle's Texas data center in the U.S. to be used by OpenAI was pushed back from 2027 to 2028.
Oracle's share price fell 10.83% on the 11th from the day before and dropped another 4.47% on the 12th. The Nasdaq also fell 0.25% on the 11th and declined 1.68% on the 12th.
As the exchange rate threatened the 1,480-won level, the government held meetings two days in a row to craft a response. Koo Yun-cheol, Deputy Prime Minister and Minister of Economy and Finance, convened an emergency economic ministers' meeting the previous day to review trends in the financial and foreign exchange markets. That morning, Lee Eog-weon, chair of the Financial Services Commission (FSC), reviewed financial market conditions with the Financial Supervisory Service, Korea Institute of Finance, and Korea Development Institute (KDI).
Min Kyung-won, a Woori Bank researcher, said, "The domestic stock market is expected to lead a weak-won tone as foreign funds shift to a net selling position, reflecting worsening investor sentiment originating in the U.S." She added, "However, micro-adjustments by the foreign exchange authorities and top-selling pressure from exporters and heavy industry companies are expected to cap the upside."