The won-dollar exchange rate against the U.S. dollar finished weekly trading at 1,368.6 won at 3:30 p.m. on the 31st. That was down 3.9 won (0.28%) from the previous trading day's weekly close. On the same basis, it was the lowest since July 24 last year (1,367.2 won), a 1 year and 1 month low.
The rate opened at 1,379.5 won at 9 a.m. that day, up 7 won from the previous trading day's weekly close. Kevin Warsh, chair of the Federal Reserve (Fed), said in his keynote speech at the Jackson Hole Economic Symposium that if he is not confident inflation is moving quickly toward the target, "there is more work to do," boosting the dollar. Markets interpreted this as the Fed not ruling out the possibility of raising the benchmark rate at the September Federal Open Market Committee (FOMC) meeting. If the United States raises rates, the dollar tends to strengthen and the exchange rate can rise.
However, the rate pared intraday gains, reversed lower, fell into the 1,360-won range, and ended weekly trading. It was also the first time since July 24 last year (intraday low 1,365.1 won) that the rate touched the 1,360-won range intraday.
The decline in the rate is seen as driven by major exporters selling dollars they hold. When corporations sell dollars, the won strengthens and the exchange rate falls. Corporate dollar selling tends to increase at month-end.
Some attribute the rapid fall from the 1,550-won range in July to the 1,360-won range to corporations' dollar selling. Min Kyung-won of Woori Bank said, "Steady selling flows, led by semiconductor corporations, are entering the market and suppressing upside in the rate."