Exchange Rate Surpasses 1390 Won... Highest in Over 1 Year and 8 Months (Update)

On the 21st, the won/dollar exchange rate started at 1,392.0 won, up 7.4 won. At a currency exchange booth in Myeongdong, Seoul, the won/dollar exchange rate was trading around 1,391.0 won. On this day, South Korea was excluded from the US currency watchlist again in the first half of this year, following the second half of last year. Photo by Jo Yongjun jun21@

As the dollar continues to strengthen, Asian currencies such as the yuan and yen have weakened together, causing the won-dollar exchange rate to open in the 1390 won range. This is the highest level in 1 year and 8 months since November 8, 2022, when it was 1394 won at the opening price.

As of 9:18 a.m. on the 21st, the won-dollar exchange rate in the Seoul foreign exchange market is trading at 1391.99 won, up 7.39 won from the previous trading day. On that day, the won-dollar exchange rate opened at 1392 won, up 7.3 won from the previous trading day, and has been fluctuating in the 1390 won range.

The continued strength of the dollar is interpreted as being influenced by the depreciation of Asian currencies such as the yuan and yen. The won is a proxy currency for neighboring countries' currencies, the yuan and yen. Generally, when the value of the yuan and yen falls, the value of the won also falls.

According to the People's Bank of China, the yuan exchange rate was 7.1192 yuan per dollar (approximately 1352.93 won) based on the previous day's closing price, depreciating by 0.05% compared to the previous day (7.1159 yuan). The offshore yuan exchange rate hit 7.2874 yuan per dollar during the session, marking the lowest level since mid-November last year.

Choi Ye-chan, a researcher at Sangsangin Securities, explained, "Earlier, the Swiss National Bank lowered its policy rate twice in a row, contrary to market expectations, leading to a relative dollar strength due to the interest rate gap with the U.S. This caused advanced country currencies to weaken. China and Japan also showed weakness by implementing more accommodative monetary policies compared to the U.S."