On the 7th, the won opened at 1,448.5 won against the U.S. dollar, up slightly from the previous day. The dollar strengthened as major currencies such as the euro, the pound, and the yen weakened.
In the Seoul foreign exchange market that day, the won-dollar rate started at 1,448.5 won, up 3 won from the previous trading day's weekly transaction closing price (as of 3:30 p.m.) of 1,445.5 won. It was 0.9 won higher than the 2 a.m. close of 1,447.1 won.
The rate rose that day on the back of a global dollar rebound. As the value of major currencies such as the euro, the pound, and the yen fell across the board overnight, the dollar strengthened. In particular, the euro came under downward pressure as the December inflation indexes in Germany and France fell short of market expectations. France's inflation rate was 0.8% on-year and Germany's was 1.8%, both below market forecasts (0.9%, 2.0%). The slowdown in inflation increased the likelihood of a European Central Bank (ECB) rate cut, leading to euro weakness.
According to Investing.com, the dollar index (DXY), which shows the dollar's value against the currencies of six major countries, fell to as low as 98.20 around 11 a.m. the previous day before rebounding after the weekly session closed. As of 8:39 a.m., it was at 98.60. By contrast, over the same period, the dollar-yen (yen per dollar) rate moved from the low 156-yen range to the high 156s, and the euro-dollar (dollars per euro) rate fell from $1.17 to $1.16.
Experts expect the rate to extend its gains on the 7th. Min Kyung-won of Woori Bank said, "Today the rate will attempt to enter 1,450 won, tracking the global dollar rebound," adding, "As major currencies such as the euro, the pound, and the yen all fell, the ability to check a strong dollar has been lost."
However, concerns about intervention by foreign exchange authorities are expected to limit the upside in the rate. Min said, "The concern that authorities could preemptively curb a rebound in the rate and head off overheating in long (dollar-buying) sentiment in advance is a factor restraining offshore dollar buying," adding, "Caution over authorities' fine-tuning and exporters' pressure to sell at the top will cap the upside."