On the 26th (local time), the U.S. Federal Reserve (Fed) held its Federal Open Market Committee (FOMC) regular meeting and strongly hinted at a rate hike in March, pushing the won-dollar exchange rate past the "psychological support level" of 1,200 won.
According to Seoul Foreign Exchange Brokerage on the 27th, as of 10 a.m., the won-dollar exchange rate was trading at 1,201.9 won, up 4.2 won from the previous closing price of 1,197.70 won. The exchange rate opened at 1,201.00 won, up 2.30 won from the previous session. The rate has been fluctuating around 1,201 won, showing an upward trend.
Earlier, Jerome Powell, Chair of the U.S. Federal Reserve, forecasted a base interest rate hike in March during a press conference following the FOMC regular meeting.
In the policy statement, the Fed explained that due to inflation significantly exceeding 2%, it seems appropriate to raise the policy rate soon, and that there is room to increase rates without damaging the labor market.
Subsequently, the market assessed the FOMC meeting results as somewhat "hawkish." As expectations grew that the Fed would accelerate tightening, the U.S. dollar strengthened. The dollar index, which shows the value of the dollar against six major currencies, rose about 0.6% from the previous day, hovering in the mid-95 range.
However, some opinions suggest that the end of the FOMC meeting has resolved certain uncertainties, and with export companies likely to sell dollars ahead of the holiday, the upper limit of the exchange rate may be restrained.
Park Jong-seok, Deputy Governor of the Bank of Korea, commented on the FOMC meeting results, saying, "The outcome largely met market expectations, but Jerome Powell's press conference was evaluated as somewhat hawkish," adding, "Interest rates rose significantly in the international financial market, and the U.S. dollar showed strength."
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