The Won-Dollar Exchange Rate Hits Highest in a Month... Up 23.4 Won to 1252.8 Won

The won-dollar exchange rate surpassed 1,250 won again as the strong U.S. employment data raised expectations that the Federal Reserve's (Fed) tightening policy could last longer.

On the 6th, in the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,252.8 won, up 23.4 won from the previous trading day. Just before the market closed, it rose to 1,253.5 won.

This is the highest level in a month since January 6 (1,268.6 won) based on the closing price. The increase is also the largest in two months since December 6 last year (26.2 won).

On that day, the exchange rate opened at 1,247.5 won, up 18.1 won from the previous trading day, and continued to rise. The U.S. employment data came out better than market expectations, strengthening the analysis that the Fed's tightening end point could be delayed, which led to a stronger dollar.

According to the U.S. Department of Labor's announcement last weekend, the number of new nonfarm payrolls in January was 517,000, nearly three times the expert forecast of 187,000 compiled by Dow Jones. The unemployment rate also fell to 3.4%, the lowest in 54 years.

Earlier, the market had bet on a weaker dollar, seeing the interest rate hikes entering their final stage after Fed Chair Jerome Powell mentioned "slowing inflation" for the first time at the press conference following last week's Federal Open Market Committee (FOMC) regular meeting. However, the strong U.S. employment data caused the dollar to strengthen again, showing significant volatility.

Domestic stock market sell-offs also pushed the exchange rate higher that day. The KOSPI closed at 2,438.19, down 42.21 points (1.70%) from the previous session. Foreigners net sold about 310.7 billion won worth of stocks in the KOSPI market.