'Risk On' After Trump's Discharge... KRW-USD Exchange Rate Nears Late 1150s (Update)

President Donald Trump of the United States [Photo by EPA Yonhap News]

[Asia Economy Reporter Eunbyeol Kim] The global risk-on sentiment has revived following the discharge of U.S. President Donald Trump, who had contracted the novel coronavirus disease (COVID-19), causing the KRW-USD exchange rate to fall to the high 1150 won range.

As of 10:14 a.m. on the 6th, the KRW-USD exchange rate in the Seoul foreign exchange market is trading at 1,158.11 won, down 5.32 won from the previous day's closing price. The exchange rate opened at 1,158.0 won, down 5.4 won from the previous day, and has been moving between 1,157 won and 1,160 won.

President Trump’s condition improved on the day, prompting an early discharge and a return to the White House just three days after testing positive.

Negotiations on a new U.S. stimulus package are also nearing agreement. It was reported that House Speaker Nancy Pelosi (Democratic Party) and Treasury Secretary Steven Mnuchin spoke for an hour on the 5th (local time) and narrowed their differences, with discussions expected to continue the next day, raising hopes for a deal before the presidential election. The expectation of a stimulus deal also boosted stock prices.

Economic indicators showed signs of recovery. The Institute for Supply Management (ISM) reported that the September ISM Services Purchasing Managers' Index (PMI) recorded 57.8, surpassing both the previous month’s 56.9 and market expectations of 57.0.

Foreign exchange market participants evaluated that risk-on sentiment has revived in the global financial markets. The market expects the U.S. dollar to remain weak through next year. The recent economic recovery in China, which has led to a rise in the yuan’s value and a synchronized movement with the Korean won, is also a factor behind the downward trend in the KRW-USD exchange rate.