The won-dollar exchange rate against the U.S. dollar closed weekly at 1,350.4 won at 3:30 p.m. on the 4th. It fell 8.9 won (0.65%) from the previous trading day's weekly closing price. It marked the 1,350-won level for the second straight day.
The rate opened at 1,358.5 won at 6 a.m., rose to as high as 1,359.6 won around 10:04 a.m., then widened its decline from 2 p.m. to hit 1,349.5 won at 3:14 p.m. It was the first time in about 14 months that the rate touched the 1,340-won level intraday, since July 1 last year (1,348.5 won).
The decline is attributed to a weaker dollar. Expectations have strengthened that the United States may not raise its benchmark interest rate. Christopher Waller, a Federal Reserve governor, said the previous day that he would support holding rates steady if inflationary pressures appear to be easing. When the United States holds rates, Asian currencies such as the won tend to strengthen comparatively.
In particular, the stronger Japanese yen (a lower yen-dollar exchange rate) also affected the rate. The won and the yen often move in the same direction. The yen-dollar rate topped 160 yen on the 1st but fell to 156.13 yen on the day.
Looking ahead, the rate is expected to move based on U.S. August nonfarm employment indicators to be released overnight Korea time. If the jobs data come in stronger than expected, the likelihood of a U.S. rate hike could rise, sending the dollar back to strength.