Dollar Weakens as US Easing Tightening Concerns... Exchange Rate Hits Lowest in About 4 Months (Update)

"Major Indicator Releases End... Will Depend on Government Bond Yield Trends"

On the 20th, the won-dollar exchange rate closed at its lowest level since August 1st (1283.8 won).

On that day, the exchange rate in the Seoul foreign exchange market closed at 1,291.6 won, down 5.3 won from the previous trading day.

The exchange rate opened at 1,296 won, down 0.9 won from the previous day, rose close to 1,300 won, and then turned downward.

Last month’s U.S. consumer price inflation rate fell short of market expectations, making the disinflation phenomenon more visible, and the atmosphere solidified around the end of the Federal Reserve’s (Fed) interest rate hikes, leading to a decline in the value of the dollar.

Additionally, reports of an imminent ceasefire agreement between Israel and the Palestinian armed group Hamas reduced the risk of war entering a lull, which also contributed to strengthening risk appetite.

Park Sang-hyun, a researcher at Hi Investment & Securities, said, "With major events and economic indicator announcements that could significantly impact the foreign exchange market now concluded, the direction of the dollar’s flow will still be influenced by the trend of government bond yields," adding, "Whether the U.S. 10-year Treasury yield breaks out of the 4.4?4.6% band will determine the further direction of the dollar."