The won-dollar exchange rate against the U.S. dollar was 1,343.1 won as of 9 a.m. on the 14th. It fell 2.8 won (0.2%) from the prior trading day's weekly closing price.
There is an outlook that the rate could touch the 1,330-won level intraday. That's because the Bank of Japan is widely expected to raise its policy rate this week by one notch to 1.25% from the current 1%. If Japan raises rates, the won could strengthen along with the yen. The won and the yen, grouped as Asian currency, tend to move in the same direction.
Min Kyung-won of Woori Bank said, "In the global FX market, pricing is reflecting Japan's hike more proactively than the U.S. Federal Reserve (Fed)," adding, "As the yen-dollar exchange rate falls, Asian currency including the won is highly likely to be linked to yen strength."
Continued dollar selling by major exporters is also a factor dragging the rate lower. When corporations sell the dollars they hold, the won strengthens and the rate can decline.
However, some expect the decline will be limited even if the rate falls. Even if it drops to the 1,330-won level intraday, there is a possibility it could rebound to the 1,340-won level. That's because corporations that import raw materials and other goods from overseas may step up bids to buy dollars at lower prices.