The won-dollar exchange rate closed at around 1,440 won. This was influenced by the decline in the value of the dollar due to the U.S.-China trade conflict. However, the depreciation of the yuan, which is highly correlated with the won, limited the extent of the decline.
According to the Seoul foreign exchange market on the 11th, the closing price for the weekly transaction rate (as of 3:30 p.m.) was 1,449.9 won, down 6.5 won from the previous trading day's closing price (1,456.4 won).
The exchange rate opened at 1,454.0 won, down 2.4 won from the previous trading day's closing price. It rose to 1,457.2 won, indicating a turnaround, but soon reversed and dropped to 1,446.8 won by 10:27 a.m. In the afternoon, it fluctuated around 1,450 won.
As the U.S.-China conflict continues, the value of the dollar has decreased. The White House announced that tariffs on imports from China have a total of 145%, which includes a 20% tariff related to fentanyl and a reciprocal tariff of 125%. Furthermore, starting May 2, a 120% tariff will be imposed on small packages under $800 coming from China and Hong Kong, increasing the intensity of the tariffs.
The U.S. inflation indicator released the night before also impacted the market by falling below expectations. According to the U.S. Department of Labor, the Consumer Price Index (CPI) for March rose 2.4% compared to the same month last year, which was below the Dow Jones' estimated figure (2.6%). The slowdown in the U.S. inflation rate has raised expectations for interest rate cuts by the Federal Reserve (Fed), further lowering the value of the dollar.
According to Investing.com, the Dollar Index (DXY), which shows the value of the dollar against six major currencies, recorded 100.07 as of 4:10 p.m. It dropped to below 99 during the day, reaching the lowest level since mid-July 2023. With the dollar showing weakness, the dollar-yen (yen per dollar) exchange rate fell to around 143 yen, while the euro-dollar (dollar per euro) rose to around $1.1327.
In contrast, the yuan against the dollar is weak. The dollar-yuan exchange rate rose to around 7.32 yuan, up from around 7.31 yuan the previous day. Although it dropped from the highest level in over 17 years, which was around 7.35 yuan on the 9th, it remains at a high level.
Min Kyung-won, a researcher at Woori Bank, noted, "As the U.S. CPI for March fell below expectations, expectations for interest rate cuts this year have been adjusted upwards, and the heightened intensity of the tariff war is causing a decrease in demand for dollar assets." He assessed that the external conditions necessary for the appreciation of the won have been prepared.
Wi Jae-hyun, an economist at NH Futures, stated, "If some overseas investment funds centered in the U.S. flow into the domestic market, it could be absorbed as downward pressure," but added that it is necessary to pay attention to the official exchange rate announced by the Chinese authorities during the day and respond to the direction of the yuan's flow.