On the 8th, the won-dollar exchange rate climbed nearly 4 won in early trading, coming close to 1,450 won. The dollar strengthened as the U.S. services sector showed solid performance.
In the Seoul foreign exchange market that day, the won-dollar rate opened at 1,449.7 won, up 3.9 won from the previous day. It was 1,447.6 won higher than the 2 a.m. closing price.
Overnight, the dollar strengthened on news that the U.S. services sector improved at the fastest pace in 1 year and 2 months. According to the Institute for Supply Management (ISM), the services Purchasing Managers Index (PMI) for December last year came in at 54.4, the highest since Oct. 2024 (56). The PMI is an indicator that gauges expansion or contraction in the economy based on 50. A reading above 50 indicates expansion, while below 50 indicates contraction.
The U.S. dollar index (DXY), which shows the dollar's value against the major six currencies, is rising. According to Investing.com, the DXY, which was around 98.2 at about 1 p.m. the previous day, rose to 98.73 as of 9:11 a.m. that day. As a result, the dollar-yen (dollar per yen) rate, which had fallen to the low 156-yen range the previous day, rose to 156.76 yen, while the euro-dollar (dollar per euro) also fell from the $1.17 range to the $1.16 range.
Experts see the exchange rate continuing to climb under the influence of a globally strong dollar. Min Kyung-won, an economist at Woori Bank, said, "With strong services data released overnight, confidence in the U.S. economy is flowing in, and the dollar is strengthening," adding, "Other currency such as the euro, which could check the dollar, are struggling to gain traction."
Min said, "Considering the structure in which dollar buying, such as importers' settlement demand and residents' currency exchange demand for overseas stock investments, dominates domestic supply-demand, upward pressure on the exchange rate is likely to persist from the start of trading, with a possible attempt to break into 1,450 won."
Meanwhile, Koo Yun-cheol, Deputy Prime Minister for the Economy and Minister of Economy and Finance, presided over a "market conditions review meeting" in the morning and said, "Volatility in the foreign exchange market remains high," adding, "We will push follow-up measures related to foreign exchange market stabilization with speed." Attending were Rhee Chang-yong, Bank of Korea governor, Lee Chan-jin, Financial Supervisory Service chief, and Kwon Dae-young, vice chairman of the Financial Services Commission.