The won-dollar exchange rate against the U.S. dollar closed at 1,500.3 won on the 18th. It fell 0.5 won from the previous transaction day.
On this day, the won-dollar exchange rate stayed in the 1,500-won range. It is seen as the result of risk appetite weakening as Government Bonds yields rose on worldwide inflation concerns. When demand for the safe asset, the dollar, increases, it becomes a factor pushing up the won-dollar exchange rate.
Net selling of domestic stocks by foreigners also affected the strong dollar. When foreigners sell stocks and exchange the proceeds into dollars, demand for dollars expands, pushing up the won-dollar exchange rate. From the 7th to this day, foreigners have recorded net selling for eight consecutive trading days. On this day, foreigners were net sellers of 3.65 trillion won on the Korea Exchange.
The slight decline in the won-dollar exchange rate is analyzed as due to export corporations converting dollars earned overseas into won. Corporations tend to hold dollars to capture exchange gains and sell when the won-dollar exchange rate rises. They also sold held dollars when it surpassed 1,500 won after the U.S.-Iran war broke out. When dollars flow into the market, it has the effect of lowering the won-dollar exchange rate.