This Week's Exchange Rate, US CPI and Korean Politics Key... 1410~1480 Won per Dollar

iM Securities presented a dollar-won exchange rate band of 1410~1480 won for this week.

Park Sang-hyun, a researcher at iM Securities, stated this on the 10th in the weekly Fx Brief titled 'Bund-driven Dollar Plunge,' emphasizing the need to focus on inflation indicators including the US Consumer Price Index (CPI) and domestic political events this week.

Researcher Park said, "Amid increased volatility in the foreign exchange market caused by various remarks from US President Donald Trump regarding tariffs, the results of various inflation indicators such as the US CPI in February will determine whether the dollar will weaken further," adding, "At the same time, the further rise in the 10-year government bond yields of Germany and Japan, which have been on a sharp upward trend, is also a variable to watch."

The dollar index, which represents the value of the dollar against six major currencies, fell sharply by 3.5% compared to the previous week as concerns over the Trump session (Trump-driven recession) and expectations of expanded German fiscal spending caused German bond yields and the euro to surge last week. Researcher Park explained, "The euro appreciated sharply by 4.6% last week," and "The German 10-year Bund (government bond) yield surged by 43 basis points (1bp=0.01 percentage point) compared to the previous week, driving the euro's ultra-strong performance."

During the same period, the dollar-yen exchange rate also dropped significantly. With Japanese government bond yields exceeding 1.5% for the first time in 16 years, the dollar-yen exchange rate fell to the 147 yen level, indicating a rise in the yen's value. The Chinese yuan also appreciated by 0.7%. Researcher Park explained, "Despite additional tariff measures by President Trump, the Chinese government presented an unprecedented fiscal deficit rate of 4% for this year at the National People's Congress (NPC), along with aggressive growth targets and a stock rally centered on Chinese big tech, which led to the yuan's strength."

Last week, the dollar-won exchange rate also declined. However, Researcher Park noted, "Although the dollar-won exchange rate fell, meaning the won appreciated, the extent of the rise was limited." He evaluated, "Along with US tariff risks, consecutive credit events such as Homeplus filing for corporate rehabilitation procedures and domestic political uncertainty risks limited the won's appreciation despite the sharp dollar decline."

He then presented the dollar-won exchange rate band for this week as 1410~1480 won, emphasizing, "Domestic political uncertainty risks may reach a critical turning point and will greatly influence the dollar-won exchange rate trend. Attention should also be paid to whether the spread of ongoing domestic credit events continues." As of the closing price on Friday the 7th, the dollar-won exchange rate was recorded at 1449.5 won.