Strong Dollar on US Fed 'Warsh' Nomination... Won-Dollar Rate Rises by 11.5 Won (Update)

Warsh's Hawkish Stance in the Spotlight
Dollar Index Rises Again

On February 2, the won-dollar exchange rate started the day by rising again to the 1,450 won level. This increase was driven by the strengthening of the dollar, following renewed attention to the past 'hawkish' (monetary tightening preference) remarks made by Kevin Warsh, the former Federal Reserve Board member who has been nominated as the next chair of the US Federal Reserve (Fed).

On February 2, an employee is monitoring the stock market and exchange rates in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. 2026.2.2 Photo by Jo Yongjun

On this day, the won-dollar exchange rate opened at 1,451.0 won in the Seoul foreign exchange market, down 11.5 won from the previous trading day, but climbed to the upper 1,451 won range in the early session.

This upward trend is a result of the announcement made on January 30 (local time), when US President Donald Trump stated that Kevin Warsh would be nominated as the successor to the Fed chair, whose term expires in May. In particular, the market's focus on Warsh's previously hawkish stance as a Fed board member has reduced expectations for a US base rate cut and strengthened the dollar.

The dollar index (DXY), which measures the value of the dollar against the currencies of six major countries, rose by 0.05% from the previous day to 97.173. After falling to the 95 range during intraday trading on January 27, it has rebounded sharply. In contrast, the market responded to concerns that Warsh's monetary policy would be unfavorable for financial markets, resulting in a plunge in the prices of gold, silver, the New York stock market, and Bitcoin.

The Japanese yen, which often moves in tandem with the won, also shifted back to a weakening trend. The yen-dollar exchange rate rose by 0.438 yen from the previous day to 155.198 yen.

Minkyoungwon, a researcher at Woori Bank, commented, "The market is focusing more on Warsh's past policy stance than his recent remarks as the next Fed chair nominee, and is responding by selling off risk assets. With the New York stock market plummeting for two consecutive days, the domestic stock market is also likely to decline, and these strong dollar and stock market trends will influence the won-dollar exchange rate."