On the 29th, the won-dollar exchange rate plunged more than 10 won against the U.S. dollar, ending weekly transactions in the 1,420-won range.
In the Seoul foreign exchange market that day, the won-dollar rate closed at 1,429.8 won, down 10.5 won from the previous trading day's (on the 26th) weekly transaction close. It is the first time the weekly transaction close fell into the 1,420-won range since on the 3rd of last month (1,428.8 won).
The rate opened at 1,440 won and fell throughout the session. In early trading at 9:30 a.m., it dropped to 1,435 won, and by 1:22 p.m., it fell to as low as 1,432.8 won. It appeared to rebound afterward, but slid just before the close to slip below 1,430 won.
The heightened caution over market intervention by the foreign exchange authorities early in the week appears to be driving the rate lower. In a message released to the media on the 24th, the foreign exchange authorities said, "You will soon see the government's strong commitment and policy execution capability (for exchange-rate stability)." In the wake of this, the rate, which opened at 1,484.9 won at the time, finished weekly transactions at 1,449.8 won, down 33.8 won from the previous day.
The stronger yen, which moves closely with the won, also played a role. According to Investing.com, as of 3:58 p.m. that day, the dollar-yen rate was at 156.2 yen. That is down 0.24% from a day earlier and 0.57% from a week earlier. The yen is firming on caution over market intervention by the Bank of Japan and expectations for a rate hike by the Bank of Japan (BOJ).
Continued net buying by foreigners in the domestic stock market also helped push the rate lower. On the day, foreigners were net buyers of 329.5 billion won in stocks on the Korea Composite Stock Price Index (KOSPI), extending net buying for a fourth straight trading day since on the 22nd. In the wake of this, the KOSPI ended trading at 4,220.56, up 90.88 points (2.20%) from the previous session.
Park Sang-hyun, a senior advisor at iM Securities, said, "With caution over market intervention by the foreign exchange authorities continuing recently and foreign buying of stocks intensifying, the exchange rate fell," adding, "The yen is also showing a firm trend, so the rate looks likely to stay below 1,450 won."