Won-Dollar Exchange Rate Hits Lowest in 5 Months... Briefly Drops to Early 1330s (Update)

[Image source=Yonhap News]

On the 19th, the won-dollar exchange rate fell to the low 1330 won range during the trading session.

In the Seoul foreign exchange market, as of 1:47 PM that day, the won-dollar exchange rate was recorded at 1331.8 won.

This is the lowest level in five months since mid-March.

Compared to the closing price of 1357.6 won at 3:30 PM on the 16th, it dropped by 25.7 won.

The decline in the won-dollar exchange rate is interpreted as being due to the weakening of the dollar.

The dollar index, which shows the relative value of the dollar against the currencies of six major countries, was 102.3 that day, approaching the lowest level of the year.

It is analyzed that expectations for a U.S. interest rate cut in September have increased, causing the dollar value to fall and the won to strengthen.

Recent major U.S. economic indicators have shown somewhat sluggish performance. According to the U.S. Department of Commerce, last month’s new housing starts in the U.S. were 1.238 million (seasonally adjusted annual rate), down 6.8% from the previous month. This figure is significantly below the expert forecast of 1.34 million compiled by Dow Jones.

The housing construction sector is slowing down, and combined with a slowdown in the manufacturing index and inflation rate, experts see a high possibility of the U.S. cutting interest rates next month.

Park Sang-hyun, a senior advisor at iM Investment Securities, explained, "Along with relief over July inflation in the U.S., the slowdown in real economy indicators centered on housing data has strengthened expectations for a Federal Reserve rate cut while increasing downward pressure on the dollar."