The won-dollar exchange rate against the U.S. dollar finished weekly transaction at 1,359.3 won at 3:30 p.m. on the 3rd. It fell 9.4 won (0.68%) from the previous trading day's weekly closing price. By the same measure, it is the lowest level in about 14 months since July 2 last year (1,358.7 won).
The rate opened transaction at 1,359 won at 6 a.m. and rose to 1,363.8 won around 9:08 a.m. It then turned lower, hitting 1,355.9 won around 10:29 a.m. Just before the weekly transaction ended, it rebounded above 1,360 won, but slipped slightly at the end to finish in the 1,350-won range.
◇ "Samsung Electronics and SK hynix keep selling dollars"
The day's decline in the rate is seen as due to dollar selling by major domestic exporters. Corporations typically tend to sell dollars at the end of the month. Lately, however, they have been selling dollars from time to time, which has been pushing the rate down. In particular, there were reportedly dollar-selling flows from Samsung Electronics and SK hynix on the day as well.
In particular, the average rate in July, when the $26.5 billion raised through SK hynix's U.S. depository receipts (ADR) listing began to hit the market, was 1,497.4 won, down 1.95% from the previous month (1,527.3 won). In Aug., it fell to 1,406.3 won, and recently it has been trying to settle in the 1,350–1,360 won range.
However, among foreign-exchange market participants, some say the day's drop was not as large as expected. Compared with the yen-dollar exchange rate, which fell more than 1% to 157.02 yen from the previous transaction day around a similar time, the won-dollar rate was closer to flat than lower.
◇ ADR supply running out… shareholder returns are a new variable
Going forward, the won-dollar rate is expected to vary depending on corporations' dollar selling. Foreign-exchange market participants see it as difficult to expect further ADR effects from SK hynix. If corporations stop selling dollars, the rate is more likely to rise.
There is also analysis that dollar-selling volumes by corporations other than semiconductor corporations have decreased. As the rate has been falling quickly, a mood reportedly formed to hold dollars first and watch the rate trend rather than rush to sell.
It is also a burden that foreign investors have been net sellers for five straight transaction days since the 28th of last month. There is growing speculation that, rather than reinvesting in the domestic stock market, they are converting to dollars and sending funds out as reverse remittances. If so, dollar demand would rise and the rate would go up.
On the other hand, some say corporations' dollar selling will continue. For SK hynix to execute 40 trillion won for share buybacks and cancellations and for Samsung Electronics to carry out 90 trillion to 110 trillion won in shareholder returns, they would need to sell held dollars. If the entire shareholder return funding is converted, it would be similar to the impact of SK hynix's ADR.