On the 12th, the won-dollar exchange rate opened near 1,461 won, up by almost 4 won. As the U.S. unemployment rate for December last year improved, the dollar is strengthening against major countries' currency.
That day in the Seoul foreign exchange market, the won-dollar rate opened at 1,461.3 won, up 3.7 won from the prior session's (on the 9th) weekly transaction closing price (as of 3:30 p.m.) of 1,457.6 won. This is the first time the opening rate has topped 1,460 won since the 24th of last month (1,484.9 won).
The rise in the exchange rate stems from weakened expectations for a Federal Reserve interest rate cut due to improved U.S. labor data. According to the U.S. Department of Labor, the U.S. unemployment rate in December last year fell to 4.4% from 4.5% a month earlier. According to FedWatch by CME Group, after the release, the market saw a 5% probability of a rate cut at the Federal Open Market Committee (FOMC) meeting on the 28th of this month. That is a sharp drop from a week earlier (16.6%).
The dollar is gaining. The U.S. Dollar Index (DXY), which shows the dollar's value against the currencies of six major countries, was at 99.24 as of 8:47 a.m. that day. It was up 0.1% from a day earlier and 0.82% from a week earlier. In contrast, the euro-dollar (dollars per euro) was down 0.12% from a day earlier at $1.1633 per euro, and the dollar-yen (yen per dollar) was up 0.18% at 158.16 yen.
An expert said the rate could enter the 1,460-won range today. Min Kyung-won, an economist at Woori Bank, said, "There is a high possibility that offshore-led dollar long (buying) sentiment will recover," adding, "Demand for currency exchange from residents investing in overseas stocks, which is holding the upper hand in morning supply and demand, will also drive the rate higher."
Min added, "However, authorities' fine-tuning caution and a recovery in foreign investor sentiment in the stock market will limit the upside in the exchange rate," and said, "With risk appetite recovering around semiconductors and artificial intelligence (AI), we expect foreign funds, which recorded large net selling late last week, to return."