Concerns are growing that the US Federal Reserve's (Fed) tightening monetary policy will last longer, pushing the won-dollar exchange rate above 1300 during trading on the 17th.
At 1:20 PM in the Seoul foreign exchange market on the same day, the won-dollar exchange rate stood at 1302.5 won per dollar. This is the first time the exchange rate has exceeded 1300 won based on the high price since December 20 last year (1305.0 won).
The won-dollar exchange rate opened at 1291.9 won, up 7.1 won from the previous trading day, and showed an upward trend.
The dollar's value rose as expectations spread that the inflationary trend would be prolonged, following wholesale prices surpassing forecasts after consumer prices in the US.
The US Department of Labor announced that the Producer Price Index (PPI) for January rose 0.7% from the previous month and 6.0% from the same month last year. The month-over-month increase was the largest since June last year.
Last month's Consumer Price Index (CPI) also rose 6.4% year-over-year, exceeding market expectations of 6.2%.
Given that US inflation shows no signs of easing, there is analysis that the Fed's tightening is likely to be prolonged.
Recently, Fed officials have been making hawkish (monetary tightening-preferred) remarks, reinforcing this analysis.
Loretta Mester, President of the Federal Reserve Bank of Cleveland, said about this month's Federal Open Market Committee (FOMC) meeting, "I saw convincing economic facts to maintain the pace of a 0.5 percentage point increase at that time."
James Bullard, President of the Federal Reserve Bank of St. Louis, also advocated a 0.5 percentage point rate hike at the last meeting, explaining, "My overall judgment is that the fight against inflation will be long."
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