Against the U.S. dollar, the won exchange rate (won-dollar rate) closed weekly at 1,415.7 won at 3:30 p.m. on the 12th. That was down 0.3 won (0.02%) from the prior transaction day's weekly close.
The rate opened at 1,412.5 won and fell to 1,411.4 won around 9:41 a.m. But it turned higher and hit 1,418 won around 12:28 p.m. After that, it moved up and down without major volatility and ended the transaction. Based on the weekly close, it has stayed in the 1,410-won range for four transaction days in a row from on the 7th.
The recent decline in the rate is seen as due to dollar selling by exporters such as SK hynix. The more corporations sell dollars, the stronger the won becomes and the rate falls. Although international oil prices are rising as talks over the Strait of Hormuz are stuck, dollar selling by domestic corporations is having a bigger effect.
Net buying of domestic stocks by foreign investors also affected the rate. Foreign investors posted net purchases of 3.3398 trillion won on the Korea Exchange that lists securities. The KOSPI index closed at 6,579.04, up 3.68% from the previous transaction day.
The rate's limited decline is attributed to dollar demand from importers that buy raw materials and other goods from overseas, analysts said. When the rate falls toward the 1,400-won range, corporations and individuals who see it as a bargain-buying opportunity are purchasing dollars.
Going forward, the rate is expected to move depending on the U.S. July consumer price index, which will be released overnight Korea time. If inflation comes in higher than expected, the U.S. Federal Reserve (Fed) is more likely to raise its benchmark interest rate, strengthening the dollar. Conversely, if the rise slows, the likelihood of holding the benchmark rate increases and the won strengthens. As the Seoul foreign exchange market has been open 24 hours since on the 6th of last month, the announcement is expected to be reflected in the rate immediately.