Won-Dollar Exchange Rate Nears 1350 Won... Breaking Record High (Update)

The won-dollar exchange rate approached 1,350 won, breaking its record high.

According to the Seoul foreign exchange market on the 26th, the won-dollar exchange rate closed at 1,348.5 won, up 12 won from the previous day.

The exchange rate opened at 1,339.8 won, up 3.3 won that day, and continued its upward trend, surging to 1,349.5 won during the session, setting a new record high. The previous record high was 1,343.0 won, recorded on August 17.

On the afternoon of the 26th, the exchange rate of the Korean won to the US dollar was displayed on the status board in the dealing room of Hana Bank's headquarters in Jung-gu, Seoul. The won exchange rate closed at 1,348.5 won, 12 won higher than the previous trading day (1,336.5 won). [Image source=Yonhap News]

The sharp rise in the exchange rate was due to a surge in U.S. Treasury yields as the U.S. Federal Reserve's (Fed) tightening stance is expected to persist for a long time.

On the 25th (U.S. Eastern Time), the yield on the 10-year U.S. Treasury briefly exceeded 4.5%, marking the highest level in 16 years since 2007. The 30-year U.S. Treasury yield also rose to 4.67% during the session, reaching its highest level since 2011.

Oh Chang-seop, a researcher at Hyundai Motor Securities, said, "The U.S. Fed hinted at the possibility of additional rate hikes, and concerns over a U.S. federal government shutdown spread, causing U.S. Treasury yields to rise." He added, "From a supply and demand perspective, foreign investors' net selling in the domestic stock market also contributed to the rise in the exchange rate."