The won-dollar exchange rate opened at 1,505 won on the 19th, up 21.9 won from the previous day. It is the first time in 17 years that the opening price has exceeded 1,500 won since Mar. 10, 2009 (1,554 won) during the global financial crisis, and the level is the highest since the intraday record (1,561 won) on the same day.
Overnight, the U.S. Federal Reserve (Fed) kept its benchmark interest rate unchanged instead of cutting it, which is seen as dampening risk appetite. When investors shy away from risk assets, the won, which is not a reserve currency, tends to fall.
On the 18th (local time), the Fed said it would keep the benchmark rate at the existing level of 3.5% to 3.75%. The Fed cut the benchmark rate by 0.25 percentage point each in September, October and December last year, but kept the rate on hold in January and again this month.
At a press conference that followed, Fed Chair Jerome Powell said, "Over the past five years, we have experienced a tariff shock and the (COVID-19) pandemic, and we are now facing an energy shock of considerable scale and duration." He added, "The rate outlook depends on economic performance, so if the economy does not make progress, there will be no rate cuts."
Min Kyung-won, a researcher at Woori Bank, said, "Expectations for Fed rate cuts have weakened, curbing risk appetite."
Rising international oil prices also fanned the won's weakness. Overnight, Israel attacked an Iranian gas field, sending international oil prices higher. On the 18th (local time) at the ICE Futures Exchange in London, the May delivery Brent crude futures settled at $107.38 per barrel, up 3.8% from the previous session.