On the 26th, the won-dollar exchange rate surged over 15 won... the largest increase since March last year

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] On the 26th, the won-dollar exchange rate surged more than 15 won, rising to the 1120 won level. The overnight surge in U.S. Treasury yields strengthened the dollar, and the decline in risk asset preference pushed up the won-dollar exchange rate.

In the Seoul foreign exchange market on this day, the won-dollar exchange rate closed at 1,123.5 won per dollar, up 15.7 won from the previous day's closing price. This daily increase was the largest since March 23 last year (20 won increase). The closing rate was the highest since the 5th (1,123.7 won).

The exchange rate opened at 1,120.5 won per dollar, up 12.7 won, and maintained a range in the low to mid 1120 won level, even attempting to break through the 1,125 won level during the session.

In the U.S. market overnight, expectations for economic recovery and inflation concerns caused the 10-year U.S. Treasury yield to spike to 1.61% at one point. As inflation was expected to rise, Treasury yields increased, leading to a drop in stock prices and a stronger dollar.

The New York stock market saw a sharp decline mainly in large technology stocks, with the Nasdaq index closing down 478.53 points (3.52%) at 13,119.43. The Standard & Poor's (S&P) 500 index closed down 96.09 points (2.45%) at 3,829.34.

On the same day, the KOSPI index also closed at 3,012.95, down 86.74 points (2.80%) from the previous day. Although the KOSPI briefly fell below the 3,000 mark during the afternoon session, it managed to defend the 3,000 level by reducing the decline before the close. In the stock market, individual investors supported the lower end of the index by net buying 3.7683 trillion won. This is the third-largest net buying amount by individuals in history, following January 11 (4.4921 trillion won) and 26 (4.2050 trillion won).

Foreign investors net sold 2.8124 trillion won, breaking the record for the largest net selling on November 30 last year. Institutions also net sold 1.0346 trillion won on the day.